Augsburg Fortress Announces Reorganization, Staff Reductions

     MINNEAPOLIS (ELCA) -- Augsburg Fortress, the publishing house of the Evangelical Lutheran Church in America (ELCA), announced a significant reconfiguration of its business July 3 that will result in consolidated sales operations and new market resource groups. The reorganization will also result in a  reduction of approximately 45 employees, including some senior administrative staff.
     Recent declines in sales and increases in operating costs preceded the decisions to reduce the workforce and reconfigure the organization, said the Rev. Marvin L. Roloff, Augsburg Fortress president and chief executive officer, in a memo to employees.
     "In spite of the hard work of Augsburg Fortress employees, our revenues continued to decline in 1999 and 2000," Roloff said in the memo. "We anticipate an operating loss again this year as well. This continued erosion of sales and our market share can't continue if we are to fulfill our mission."
     Roloff said he announced the workforce reductions "with great personal sadness."  Staff reductions are expected to be completed during the week of July 16, and a severance and job placement package will be offered to departing employees, Roloff said.
     Prior to the staff reductions, Augsburg Fortress employed 225 people at its corporate offices in Minneapolis and 126 people at 11 other locations in the United States, three locations in Canada and one location in Puerto Rico.
     The Augsburg Fortress board of trustees supports the decisions to reorganize and reduce the workforce, said Richard E. Lodmill, board chair, Seattle.  The board recognized the need to reorganize given the decline in sales, he said.   Reducing the workforce is a "painful experience, but a necessary step for the publishing house to continue to operate," he said.
     Acknowledging that Augsburg Fortress has lost ELCA customers in recent years, Lodmill said he hopes they will return. "We hope congregations will give us another shot," Lodmill said. "We've got a Lutheran tradition, and it's reflected in our work.  That's something I feel strongly about."
     The Rev. H. George Anderson, ELCA presiding bishop and former chair of the Augsburg Fortress board, is saddened by the reduction in the work force, said the Rev. Robert N. Bacher, ELCA executive for administration and executive assistant to the presiding bishop. Bacher, who represents the presiding bishop on the board, said Anderson is encouraged by the tough decisions made by Augsburg Fortress' leadership and hopes the actions will lead to "a sense of renewal."
     "The ELCA will continue to work with Augsburg Fortress leadership and support them as they make difficult decisions," Bacher added.
     At the spring 2001 meeting of the Augsburg Fortress board of trustees, George W. Poehlman, vice president for finance, reported the ELCA publisher finished 2000 with a net loss of $3.037 million. In addition, Augsburg Fortress showed a net loss for the first quarter of 2001 of $2.305 million, he said.
     Because of slipping revenues and sales, the company must reduce its payroll by $2.5 million annually and reduce other expenses, such as travel, marketing, development and training by $900,000 for the remainder of 2001, Poehlman said July 5.
     In  response, the latest reorganization of Augsburg Fortress will reduce administrative layers, eliminate costly overlaps and simplify reporting lines, Roloff said.  "It will strengthen our responsiveness as the publishing house of the ELCA," he said.
     The new plan will consolidate all sales activities into a single group to serve the entire publishing house, Roloff reported in a memo to employees.  These new sales groups includes field sales, stores, customer service, events and Web sales.  Under the new plan, the former ELCA and ecumenical strategic business units will be replaced by four market resource groups that focus on the publishing house's core markets in education, worship/music, congregational resources and ecclesiastical arts, Roloff said.  The academic/professional development and consumer groups will remain as separate market resource groups.
     Another significant change is the development of an ELCA church relations group.  It is responsible for coordinating relationships in all expressions of the church, including the ELCA, its full communion partners and the Evangelical Lutheran Church in Canada, he said.
     Earlier this year, the publisher's relationship with the ELCA came under scrutiny. The board for the ELCA Division for Congregational Ministries (DCM) authorized the division's executive directors to "investigate alternative" means of "publishing, producing and distributing resources" designed to assist congregations in carrying out their ministries.  The board also requested that the ELCA Church Council "review the relationship between Augsburg Fortress Publishers and the ELCA churchwide offices, particularly evaluating the effectiveness of the current partnership with the Division for Congregational Ministries."
     In April, the ELCA Church Council requested that staff of the ELCA Office of the Presiding Bishop establish a task force to review the relationship between Augsburg Fortress and churchwide units, particularly the ELCA Division for Congregational Ministries (DCM).
     While the company's structure has been changed, Roloff said strategic priorities for the publisher adopted by the board of trustees in 1999, remain:
     + Position Augsburg Fortress as the premier Christian communication organization in the United States;
     + Refocus the company's business systems to create a market- driven organization;
     + Deepen and broaden the company's focus on ELCA congregations and expand to the ecumenical market;
     + Develop and launch a new marketing thrust aimed at select consumer markets;
     + Expand the company's business capabilities through strategic alliances, mergers and acquisitions. ----
       Augsburg Fortress can be found at http://www.augsburgfortress.org/ on the Web.

For information contact:
John Brooks, Director (773) 380-2958 or NEWS@ELCA.ORG
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