Layoffs Expected, Huge Revenue Drop Possible at Wounded Warrior Project

It's been a rough six months for Wounded Warrior Project, and it's about to get rougher.

According to the Florida Times-Union, new Wounded Warrior Project CEO Michael Linnington, who took over for former CEO Steven Nardizzi and former Chief Operating Officer Al Giordano following the charity's massive public controversy, said he expects layoffs as part of the organization's restructuring.

Linnington was short on specifics, saying the charity won't know until September how many of its roughly 600 employees it would let go. He also expects pay cuts for senior officials, a move many expected when Linnington took over. (His $280,000 starting salary is 40 percent lower than Nardizzi's $473,015 salary prior to his release.)

“I have a much different salary than my predecessors had, and I think that’s appropriate,” Linnington told the Florida Times-Union. “We’re looking at all of the salaries of all of our executives now, and I think that you will see them all trend down, as well. That’s part of trying to squeeze every nickel out of every donor dollar and to get it where it’s most needed: with those who served.”

For an organization that had its budget publicly scoured and analyzed down to the last penny, these changes were more or less expected. The big question was how the media scrutiny and public backlash would affect Wounded Warrior Project's bottom line. And while we won't know specifics until the charity eventually releases its 2016 financials, we may now have a better idea.

Buried toward the bottom of the Florida Times-Union's report was this nugget, emphasis ours:

Nardizzi said Friday that he wishes Linnington well and called it a “great blessing” to help wounded warriors while running the organization. But he criticized its board of directors for agreeing with his decisions behind the scenes for years and then changing their minds more recently about how Wounded Warrior Project should be run. Based on his projections, they will make about $200 million this year—half of what they brought in last year, he said.

Now, it's best to take that with a grain of salt, given the source of the information. Nardizzi did not take well to the board's decision to release him in the wake of the controversy, and he's made clear—even there, to the Florida Times-Union—that he's still not happy. It's also unclear how much of Wounded Warrior Project's financial information he still has access to, and whether he's basing his projections off incomplete or outdated information.

But Nardizzi has no reason to fabricate those numbers. And they're not surprising considering the number of donors who disavowed Wounded Warrior Project on social media and elsewhere.

If the revenue drop is anywhere in that ballpark, though, it is potentially devastating. Despite the allegations of wasteful spending, Wounded Warrior Project still spent $148.6 million on programs in 2014, the last year for which records were available, and recently launched its $100 million Warrior Care Network. If it's true that the organization's revenue dropped by half to $200 million, there's no way it could keep up that kind of program spend.

That's the problem Linnington now is tasked with solving.

“We have a long road ahead of us, and the mission is huge, and it’s going to continue to grow,” Linnington told the Florida Times-Union. “We have to be as nimble and as transparent and as responsive as we can possibly be.”