Washington archdiocese to make layoffs amid ‘crippling economic challenges’

McElroy: ‘Dedicated, hard-working employees will lose their jobs’

Archdiocese of Washington will layoff one quarter of its chancery workforce Friday, as Cardinal Robert McElroy aims to address five years of major deficit spending in the nation’s capital see.

Archdiocese of Washington pastoral center in Hyattsville, Maryland. Credit: Farragutful/wikimedia CC BY SA 3.0

The layoffs are part of McElroy’s plan to balance the archdiocesan chancery’s budget, after the cardinal lamented “crippling economic challenges” in the Washington archdiocese.

“The financial impacts of the pandemic and the fallout of the McCarrick scandal, coupled with an extended period of inflation and volatile financial markets, have proven to be crippling economic challenges to the pastoral center of the archdiocese,” McElroy wrote in a June 5 letter to curia employees, which was obtained by The Pillar.

“The Pastoral Center has had an annual operational deficit of approximately $10 million per year for each of the last 5 years, causing the Archdiocese to draw from financial reserves to cover shortfalls.”

“I have come to the painful realization that the only way forward is to take drastic measures to achieve a balanced budget by July 1st of this year,” the cardinal added.

“This means that the archdiocese will need to cut spending, reduce its workforce and restructure departments to accommodate a more streamlined pastoral center.”

“The most difficult decision that I have had to make in order to achieve a balanced budget was to authorize a reduction in force to eliminate approximately 30 positions of pastoral center staff. Several vacant positions will be left unfilled, and a number of dedicated, hard-working employees will lose their jobs.”

The Pillar reported in December that the archdiocesan curia was facing a $10 million dollar annual operating budget, and had faced annual seven-figure deficits before the McCarrick scandal exacerbated the problem.

Sources in the archdiocese pointed both to the McCarrick scandal and, they said, patterns of mismanagement in recent years, as causes of the deficit.

At the same time, some prelates have asked whether the archdiocese pension fund is sufficiently funded, with some predicting that ongoing financial difficulties could eventually lead to delayed retirement ages for archdiocesan priests. The archdiocese has said it expects the pension fund to remain solvent.

But the chancery’s operating budget deficits led Cardinal Wilton Gregory, then Washington’s archbishop, to announce last year a sweeping reform of the archdiocesan parish assessment system. The new policy made all donations and parish income — even previously restricted gifts and grants — liable to diocesan taxation.

That move would generate some $3 million in additional revenue for the archdiocesan chancery, Gregory told priests in an October 2024 letter obtained by The Pillar.

The projected revenue increase would seem apparently not enough, as McElroy said Thursday that the archdiocesan “financial reality” required the “painful” decision to cut jobs.

Particular employee reductions have not been announced internally. The archdiocese human resources department is expected to meet with some individual employees Thursday afternoon and Friday morning, ahead of an all-hands meeting June 6 to discuss the layoffs.

And while it is not clear how much financial loss can be attributed to the McCarrick scandal, both McElroy and his predecessor have acknowledged that the matter has contributed to revenue decreases in the archdiocese.

During his tenure in office, Gregory did not release records regarding Theodore McCarrick’s own financial activity during the six years he led the Washington archdiocese. But the former cardinal operated an unaudited discretionary fund in the archdiocese during that time, which was believed to have been used for gifts to Church officials in the U.S. and in Rome, and to be possible evidence of the extent of McCarrick’s network among the Church’s hierarchy.

In 2020, there were more than 200 chancery employees in the Washington archdiocese.

That year, the archdiocese announced 17 layoffs from its chancery staff, amid declining revenues impacted by the Covid-19 pandemic. Staff cuts continued, so that by 2025 there were roughly 120 chancery employees in the Washington archdiocese, which is home to 650,000 Catholics.

The archdiocese has not yet been reached for comment.

Meanwhile, McElroy’s June 5 letter expressed regret for job losses in the Washington archdiocese.

“I apologize profoundly to those who will be losing their jobs. This process is not a reflection on the quality or importance of your work,” McElroy wrote.

“I am sensitive to the reality that there are many people and families who will be impacted by this process—whether it be a devoted employee who loses his or her job, a remaining co-worker who must take on additional responsibilities, or the ripple effect on the many who are served by an important ministry that can no longer be funded at past levels.”

Editor’s note: This story is developing and has been updated since publication.