Faced with declining revenue in its flagship program service for the third consecutive year, the American Red Cross has laid off 2 percent of its staff in the Biomedical Services Division. The layoffs, ranging from October to the beginning of this month, represent about 360 positions in Biomedical Services, which employs approximately 18,000 people.
The changes will affect a variety of locations, including some at headquarters in Washington, D.C.
The Red Cross projects processing one million fewer blood units during the next fiscal year compared with five years ago. “Our current infrastructure is larger than necessary to collect one million units less,” said Stephanie Millian, director of communications, biomedical services, via a statement. Due to “significant changes in the marketplace,” the Red Cross has reduced annual whole blood collections from 6.5 million Fiscal Year 2009 to a projected forecast of 5.5 million in Fiscal Year 2014. “We are taking actions to align appropriate staffing resources to blood collection needs,” she said.
“The health care industry is putting increasing pressure on all blood collection agencies to continually reduce fees, and all blood banking organizations are looking for ways to respond. Rather than attempting to react to market fluctuations, the Red Cross is analyzing the long-term, big picture outlook of the industry,” Millian said.
“The Red Cross has taken many cost-saving actions throughout the Biomedical Services structure over the past several years to address tough economic conditions across the blood banking industry, and more changes are needed,” Millian said. “Overall demand for blood products has dropped as medical treatments advance and fewer transfusions are necessary. We must continue to adjust the way operate in order to compete in the new environment. In some cases, this means aligning our number of people to meet our operational needs,” she said.
Program revenue from Biomedical Services, which can comprise as much as two-thirds of total revenue for the organization, dropped to $2.037 billion for the fiscal year ending June 2013, down 5.5 percent from the previous year. It was the third consecutive year of declines, according to the organization’s financial statements and tax forms.
Biomedical services revenue had been at least $2.11 billion in each of the past five years, topping out at $2.219 billion in 2010, while overall revenue had been near $3.5 billion until 2012 when it dropped to $3.154 billion.
“Red Cross is committed to doing the most it can to make the transition as smooth as possible for them by offering severance packages and outplacement services,” Millian said. “While these changes will be difficult, we remain committed to providing patients, hospitals and Red Cross blood donors with the high level of quality service they expect and deserve. Red Cross chapters and their services to the public will not be affected by the change to our Blood Services operations.”