The Wounded Warrior Project announced Wednesday that it will lay off several executives and dozens of other employees and will cut some of its services as officials say donations have fallen this year amid a storm of negative news stories, according to reports and a statement from the organization.
Wounded Warrior will cut about 15 percent of its roughly 600 employees, chief executive Michael Linnington told Stars and Stripes, adding that the nonprofit has lost a lot of support over the past year amid sustained news coverage that has been critical of its spending polices.
In its statement, the organization said it’s also moving to consolidate some operations to reduce administrative costs.
The Military Times reports that Wounded Warrior plans to eliminate some services, including its Transition Training Academy, an employment program to help veterans find jobs. The nonprofit is exploring partnerships with other groups in hopes of providing the services another way, according to the Military Times.
The organization will focus its efforts on programs to help those suffering from traumatic brain injuries and post-traumatic stress disorder, according to its statement. It may also add more employees to programs dealing with mental health and long-term in-home support, among other issues, but it noted that those potential hires would not make up for other job losses. It also said it would be more transparent about its finances.
Mr. Linnington told the Military Times that the nonprofit did not plan to immediately reduce grants to other organizations and would boost funding for its Long-Term Support Trust, a fund to aid disabled veterans who lose their caregivers. The fund has yet to make any disbursements, according to news reports, and some critics have questioned why the trust’s $90 million is being socked away while many veterans need assistance now.
The organization said in its statement that it is still evaluating its services, and further restructuring will continue. Whether that will include more layoffs or program cuts is unclear. The group had not responded to The Chronicle’s requests for comment by press time.
Drop in Revenue
The announcement of layoffs and cuts comes a week after the nonprofit’s former chief executive, Steven Nardizzi, told The Chronicle that Mr. Linnington had told him revenue was projected to fall by more than half — to $185 million — in fiscal 2017, which starts in October. Mr. Nardizzi, whom the organization fired in March under a cloud of negative news stories, said Mr. Linnington told him about the estimated revenue shortfall in July in an “in-depth” conversation before Mr. Linnington started as chief executive. The organization’s revenue came in at $398.7 million in 2015, according to its latest informational tax Form 990.
Wounded Warrior officials said the revenue figure Mr. Nardizzi provided was wrong but declined to give an updated amount for fiscal 2016 or an estimate for 2017. Mr. Linnington told Stars and Stripes that he would report the organization’s losses at the end of September.
Two sources with knowledge of the situation at Wounded Warrior said officials had indeed been discussing in recent months a revenue projection that was below $200 million for 2017 but said they did not know what the charity’s latest projection is. The sources asked not to be named.
The organization has been reeling since The New York Times and CBS released investigative reports in late January alleging that the nonprofit spent more on overhead and fundraising than similar charities and splurged on travel, hotels, conferences, and parties. The news organizations also said the nonprofit had a toxic work culture in which disloyalty was punished.
The organization’s board has denied most of the charges, as has Mr. Nardizzi and the group’s former chief operating officer, Al Giordano, who was also fired.
