Title: Augsburg Fortress Announces Reorganization, Staff Reductions
ELCA NEWS SERVICE

July 6, 2001

AUGSBURG FORTRESS ANNOUNCES REORGANIZATION, STAFF REDUCTIONS
01-184-JB

     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 [log in to unmask]
http://listserv.elca.org/archives/elcanews.html