Sixty-one employees or roughly 15 percent of the staff have been laid off by Kripalu in recent days. The cuts are part of significant changes the nonprofit's executives say are essential to maintaining their mission, in light of economic struggles that have drastically reduced business expectations for 2009.
The decision to lay off employees was made relatively quickly, according to Kripalu's CEO Garrett Sarley. He said bookings for the coming year began dropping precipitously over the last two months, and the organization is forecasting a 25 to 30 percent drop in business for the year.
"It was very sudden. We started to see it six weeks ago and in the last three weeks it started to get much, much more steep," said Sarley.
In recent weeks, bookings for 2009 have gone from being down roughly 10 percent to down as much as 25 percent, according to Sarley. And while he expects those numbers to improve by the end of the year, it is a marked change from the 25-year-old nonprofit's recent growth.
The organization draws about 25,000 people to Stockbridge each year.
"That's a big change for us, because for the last five years we've gone up every year," said Sarley.
In that time span of five years, Sarley said revenue had about doubled, and the number of people visiting Kripalu grew significantly. But with the drop in business and high expenses, cuts became necessary, according to Sarley.
"All told, we went through and we had to cut," Sarley said. "We have very high overheard and very high fixed costs. There is no wiggle room on some of these things."
In 2006, the last available year for such information, Kripalu's revenues were about $23 million.
The job cuts are across the board, according to Sarley, with no one department getting hit the worst. In all, 35 full-time and 26 part-time employees were laid off. Sarley said Kripalu is working to make the transition as easy as possible, getting laid off employees in touch with government agencies and providing a minimum two-week notice.
All bonuses for 2009 were eliminated as well. While Sarley took a 15 percent pay cut, all other executives took 10 percent cuts and all senior management took 5 percent pay cuts.
In addition to staffing cuts, there will be other program cutbacks and cutbacks on future expansion programs. Some of those cuts include reducing clinical health components, college semester programs, and yoga research conducted in conjunction with Harvard University.
"It's very disappointing and wrenching to eliminate jobs and to retrench on some of our mission-related projects, but I think those had to be done and they had to be done early in the game. ... That will provide a future to Kripalu," said Sarley.
And while many people are cutting back on unessential spending, Sarley feels that is not necessarily the case for his field.
"I think it's the opposite. I think all over consumer spending is way, way back, so everyone who relies on consumer spending feels that. I think Kripalu feels that less than some others," said Sarley.
Kripalu joins KB toys, which laid off 240 employees in December, and Sabic Innovative Plastics, which laid off 40 of its Pittsfield employees, as one of the area's largest employees forced to cut staffing due to the economic downturn.
Last year, Kripalu broke ground on a capital expansion plan that will include an annex with 80 guest rooms. The project is backed by a tax-exempt bond awarded to nonprofit organizations. While other future projects are suspended, a spring opening is expected for the annex.
And while Sarley said there are no plans for further cuts, he did note that there could be room for a return of employees or programs that were eliminated if the economy turns around.
"The way we made the workforce reduction, we did our best to keep the organizational memory and knowledge of some of these mission-related expansion projects. So if the economy turns around and we're able to get our feet under us, we would like to restart some of those for sure," said Sarley.
Also last year, Stockbridge and Kripalu setteld on a payment in lieu of taxes agreement. Kripalu agreed to pay $30,000 for the 2008 fiscal year, with a 3 percent annual increase for future payments.
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