By Bruce Barton

Up to 50 percent of staff to be laid off

Reacting to the ongoing slagging economy, officials with the David and Lucile Packard Foundation announced last week they are making dramatic cuts in staffing and grants for next year.

Packard plans include grant reductions down to $200 million for 2003, a 65 percent drop from the $451 million granted in 2001. The prominent foundation also plans to cut its employee base from 30 percent to 50 percent and consolidate its headquarters into two downtown Los Altos buildings.

Although the impact on already hurting non-profits that depend on the foundation stands to be great, Packard officials said the foundation will continue strong support for its hometown.

“With our Los Altos community programs, we will maintain the same institutional commitment,” said Chris Decardy, Packard communications manager. “We’re not ending or closing our commitment to Los Altos by any stretch,” he said, although he noted funding to these long-supported organizations may be less.

“The big hit for us was last year,” Decardy noted, when stock misfortunes forced Packard to decrease its grant funding from $451 million in 2001 to $250 million in 2002. McCardy said funding commitments made in 2002 will be honored.

He said Packard held off cutting staff last year to see if the economy would rebound, as many financial experts predicted it would. However, current economic conditions are looking to exist another year or more, forcing Packard’s hand.

Of the 160 people currently employed with Packard, as many as 80 could lose their jobs. Packard officials plan to make the cuts by the end of the year.

Packard, which looked to expand headquarters in Los Altos only two years ago, will now confine offices to 175 San Antonio Road and 300 Second St. Employees will move out of offices at the Gateway Building, Foothill Expressway and San Antonio, and rented spaces at 280 Second St. and El Camino Road.

Despite the cuts, McCardy said Packard is giving away a higher percentage of funds than the 5 percent of assets annually required by law.

He said Packard is granting 9 percent of its assets for 2002 and 8.6 percent for 2003.

“The message here is that we’re trying to help the widest array of grantees and their beneficiaries,” McCardy said.

Packard officials are consolidating six program areas down to three: conservation and science; children, families and communities; and population.

The foundation’s arts program will be confined to four local counties, Santa Clara, San Mateo, Santa Cruz and Monterey. Philanthropy and Organizational Effectiveness programs have been dropped, but Packard officials said they will still help nonprofit groups “more generally through our other programmatic work and occasional grants through our president’s office.”

Although many groups who have benefited from Packard’s largess will be smarting from the latest news, McCardy offered a silver lining.

“We’re still near the top 10 foundations in the country,” he said. “At $200 million, we can still do a lot of good things.”

He acknowledged, “So many are going through difficult times. Let’s hope we’ve seen the bottom of this.”