RTI International says cuts in federal funding will lead to 525 permanent layoffs at its Durham office, many without the customary 60-day notice. Layoffs began March 7 and will continue through at least May 1, according to a Worker Adjustment and Retraining Notification filed with the state.
The nonprofit research institute was formed in 1958 to promote research from the Triangle’s three major universities, Duke, UNC Chapel Hill and NC State. It was the first employer at Research Triangle Park, which is split between Durham and Wake Counties. RTI had employed about 6,000 workers in 75 countries, as of last year. It wasn’t clear how many are based in North Carolina.
RTI officials declined to immediately respond to questions Wednesday.
Though initially a North Carolina-driven institution, the group has become heavily reliant on federal funding, including about 84% of its revenue in 2022 and 2023. RTI International received about $2.3 billion from the federal US Agency for International Development, or USAID, for nonmilitary foreign assistance between 2013 and 2022, the sixth most among all organizations, the News & Observer of Raleigh has reported.
That heavy reliance on Uncle Sam has made it vulnerable to cost-cutting efforts by the Department of Government Efficiency, led by Elon Musk.
RTI’s press release today cited layoffs of 340 U.S.-based staff members, including 177 in North Carolina. In February, RTI announced “temporary layoffs” of 226 U.S.-based workers, including 61 in North Carolina.
Laying off workers was not easy, but it’s necessary to position RTI for long-term success and strengthen our ability to serve federal, state and local government and commercial clients,” CEO Tim Gabel said. “RTI’s foundation is strong, and transforming our organization to align with broader market shifts will enable new opportunities for science-driven growth.”
In its state layoff filing, RTI said it had received an unprecedented number of federally-funded project cancellations and work stoppages. Thus far, RTI has received over 80 project cancellations, and numerous other projects have been issued Stop Work Orders. The impact of these unprecedented events is estimated to reduce RTI’s operating revenue by more than 30%.”
RTI said the “such rapid and sweeping changes in federal funding for so many programs was not expected and occurred with little to no advance notice. Because of this sudden loss of funding on which RTI relies and the unavailability of alternative funding, RTI is forced to eliminate positions with fewer than 60 days’ notice,” according to the filing.
RTI reported total assets of $494.3 million at the end of its 2023 fiscal year, with revenue of $1.24 billion and expenses of $1.22 billion, according to reports filed with the IRS.
About a dozen RTI executives received total compensation topping $500,000 in 2023, led by Gabel’s $1.4 million, the 2023 filing noted. The group’s board has long included prominent Triangle area executives and higher ed officials.