Issue Date: May 4, 2009
Chemical Society Cutbacks
Investment losses, declining ad revenues, and falling institutional print subscriptions to its journals and other publications have forced the American Chemical Society to cut 3% of its workforce and make further reductions to operating expenses and retiree medical benefits. The cost-saving measures were announced on April 28.
"We were looking for a total package of savings that, in light of the global economic downturn, would help us achieve the goals laid out in our 2009 budget and continue to operate in the black," says ACS Executive Director and CEO Madeleine Jacobs. In addition to job cuts, the society has capped certain retirement health benefits and reduced general expenses across all operating units. "The cuts were strategic, they were not evenly distributed," Jacobs says.
The society's Publications Division took the biggest hit in job cuts. Of a total of 56 ACS employees who were laid off, 40 worked in the ACS Publications Division, including nine members of the C&EN staff and 10 members of C&EN's Journal News & Community Department.
ACS Publications Division Director Brian Crawford says two driving factors were behind the division's cuts: declining ad revenues for C&EN, especially classified job advertising, and cancellation of print subscriptions to ACS journals by institutional subscribers. The switch from print to electronic versions of ACS journals has happened at a much faster pace than anticipated, he says, resulting in a revenue loss.
Nonetheless, Jacobs and Crawford both stress the fundamental financial health of ACS and its revenue-generating units, which include Chemical Abstracts Service, ACS Publications, and Membership & Scientific Advancement. Jacobs notes that although ACS saw the value of its unrestricted reserves fall starting in late 2008, from about $212 million to about $60 million, the society is liquid, with nearly $275 million in cash and investments. She says declines in the capital markets and ACS's obligation to fund its pension benefits led to the dramatic drop in reserves that occurred. By freezing accruals in the society's defined-benefit pension plan and by capping retiree health insurance, she says, ACS has been able to restrain the decline in reserves.
The cuts are "geared to the long term," Crawford says. He notes that the Publications Division remains at the forefront of scientific publishing operations that are gradually shifting to all or mostly electronic formats and that the shifts entail some pain. But "I anticipate that the actions taken will suffice for the remainder of the year and should position the Publications Division for the next three years," he says.
"The staff reductions we made were painful but necessary," C&EN Editor-in-Chief Rudy Baum says. "I remain committed to producing a high-quality, weekly newsmagazine in print and electronic formats that informs ACS members and other readers of important news, events, and trends in the chemical enterprise in a timely, accurate, and balanced fashion. That remains C&EN's mission, and we will continue to fulfill it."
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