Oxfam’s finances are “not sustainable” under current conditions, and restructure plans will have to go ahead, the charity’s chief executive told staff yesterday.
In an email to staff seen by Civil Society News, Danny Sriskandarajah said that Oxfam GB would be looking to “reduce costs and increase efficiencies” as it deals with the financial pressures heightened by the coronavirus pandemic.
As part of this process, Oxfam GB will also be reopening its consultation on restructuring the organisation, which some staff fear will lead to job cuts.
The consultation, known internally as the change process, had originally been set to open for staff in March, and was then postponed when the severity of the pandemic became apparent. It will now open again next month.
Sriskandarajah acknowledged that this was likely to be a controversial decision, given that the consultation will re-start while two-thirds of staff are still on furlough.
Losing money
Sriskandarajah’s email says that Oxfam GB is making a net loss of £5m every month from the closure of its network of charity shops during lockdown, as well further losses from the cancellation of fundraising events.
“Even when the UK government confirms its approach to lifting the lockdown, expected on Sunday, it will take time for activities to resume,” he writes.
“And while the UK government’s Coronavirus Job Retention Scheme is helping to reduce costs, it does not come close to making up the shortfall in our income. This is clearly not sustainable and our trustees rightly expect us to take prompt and decisive action.”
Sriskandarajah describes the financial pressures as “greater than any I have known in my career”.
Staff consultation
On the decision to restart the staff consultation, he writes: “One decision I am afraid we must take immediately is to restart our change process, launching the consultation on 3 June. I know how difficult and worrying this news will be for you, and I am very sorry that we are not able to defer it for longer.
“At the same time, we will be extending our participation in the furlough scheme until the end of June, in line with the UK government’s timetable”.
The email says that Oxfam GB has received advice that staff can still participate in the consultation even when furloughed from other work for the charity.
“Clearly our preference would have been to avoid moving ahead with a change process while colleagues are furloughed and/or unable to access Oxfam offices. Regrettably, the financial outlook dictates otherwise,” the email says.
Signalling that there may be more difficult decisions ahead even after the consultation has been concluded, Sriskandarajah adds: “The complex and fast-changing nature of the challenges we face mean that further change will almost certainly be needed in the future, but that, in itself, does not take away the need to reduce costs and increase efficiencies where we can now.”
Threat to overseas work
The email also suggests that Oxfam GB may be forced to rethink its aid work overseas.
It states that the executive board will be meeting in the months ahead “to decide on some fundamental aspects of our work”, including “how many countries we work in, how country teams will be supported in the future, and how we improve or replace the current model”.
All-staff meeting
It is understood that Oxfam GB will hold an online meeting open to all staff on Tuesday, where the proposals will be discussed.
The consultation process will last until 24 June, according to the email, with a decision issued by the charity on 15 July.
Oxfam: a 'difficult decision'
A spokesperson for Oxfam GB said: “I can confirm that we have taken the difficult decision to press ahead with restructure plans at this time.
“Like many charities, Oxfam has suffered a sharp drop in income as a result of the coronavirus pandemic and we have no option but to take action now to reduce our expenditure. The closure of our shops alone is costing us £5m every month.
“Before the Covid crisis, we had conducted a strategic review of our operations to ensure that we adapt to a changing world, live our values and are as effective as possible in fighting poverty over the next 10 years. These plans are being reviewed in light of the current situation and to ensure that we are able to do everything possible to protect the communities we work with both from Covid-19 and the brutal impact on people’s ability to feed themselves and their families.”
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