LifeWay announces budget cuts and staff reductions

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NASHVILLE, Tenn.—LifeWay Christian Resources is implementing budgetary freezes, cutbacks and staff reductions in an effort to cut $25 million to $30 million of recurring expenses from its operating budget.

LifeWay CEO Ben Mandrell cited a steep and steady decline of sales since mid-March, as well as uncertainty in the ability to host camps and events this summer due to the COVID-19 pandemic as reasons for the actions LifeWay is taking.

“LifeWay stands to lose tens of millions of dollars of revenue that the organization would normally generate over the summer months from camps, events, VBS and ongoing curriculum sales,” Mandrell said.

“LifeWay is mitigating these losses as much as possible through various expense reduction plans, including staff reductions and cuts in non-employee expenses. Additionally, LifeWay will likely have to use money from its reserves to cover a portion of the lost revenue.”

Staff cut, salary increases suspended

The organization will reduce staff, freeze all hiring and discretionary spending, and suspend salary increases and matching retirement plan contributions for all employees. In addition to these measures, the members of the executive leadership team will give up one month’s salary beginning in May. These temporary expense reductions go into effect May 1.

LifeWay announced recently it is exploring options for the sale of Ridgecrest Conference Center due to changes in organizational strategy, rising costs and uncertainty surrounding COVID-19.

“We know these decisions will cause pain and affect every LifeWay employee in some way,” Mandrell said. “But we are committed to helping our employees transition well.”

LifeWay will provide a comprehensive package of benefits to those impacted by the staff reductions, including severance pay where applicable.

“We hope these proactive steps will allow LifeWay to continue ministering to churches throughout the crisis, however long it lasts, and long into the future,” Mandrell said. “We know the COVID-19 crisis has created a unique challenge for churches as they find new ways to gather, and many are also facing severe financial strains.


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“We want to make sure LifeWay is in a position to continue serving churches and church leaders to help them fuel their ministries. These are challenging times, but I am confident the Lord will use this for His glory and will push LifeWay into the future in a fresh way.”

COVID-19 hit hard

Mandrell said the COVID-19 crisis hit while LifeWay was still rebounding from the closing of its brick-and-mortar stores. In March 2019, LifeWay announced the closing of its retail chain due to nearly $50 million of losses from 2014-19. While LifeWay closed its last store in November 2019, the company still is working to settle more than 30 leases.

At the February LifeWay board meeting, Mandrell reported LifeWay had experienced a successful transition in closing its retail chain and had seen significant growth in its direct sales channels.

Through February 2020, sales through LifeWay’s direct channels were 12 percent above the same period the previous year, according to Mandrell. “We were pleased with the progress we had made in a fairly short period of time.”

LifeWay exceeded its first quarter revenue budget of $56 million by $600,000 or 1 percent. By the end of March, LifeWay was 3 percent ahead of budget.

However, much of the progress LifeWay was experiencing in the early spring slowed dramatically as shelter-at-home orders spread across the nation and churches were no longer meeting in person.

“It seemed like overnight we went from serving the church gathered to serving the church scattered,” Mandrell said. “I’m so proud of how quickly the teams at LifeWay came together to provide free digital resources to churches, families and individuals so discipleship could continue.”

Multiple scenarios considered

With an imminent economic decline in sight, LifeWay leaders began to plan for various scenarios that would allow the denominational publisher to continue resourcing churches.

LifeWay saw five consecutive weeks of steep revenue decline across all sales channels; the trend is expected to continue. Revenue across key channels is down 24 percent compared to the year prior. While book and Bible sales continue to see strong growth through LifeWay channels, the decline in revenue is largely due to a sharp drop in bulk orders from churches for resources like ongoing Sunday School curriculum, Bible study materials and VBS.

“Churches and church leaders are enduring a season of heartbreak and pain,” Mandrell said. “Since our mission is tied so closely to local churches, we expect the impact of COVID-19 to continue to be felt here at LifeWay as churches slowly and cautiously begin to reopen their facilities and gather in person.”

Mandrell said, “the good news is the local church will rebound and recover, but it will take time and will introduce new ways of thinking about ministry.

“We have to be ready to adjust to the needs of churches if we want to be relevant in a post-COVID world,” he said. “Church operations and ministries are going to look different for an indefinite period of time.”

Seeking better financial footing

Mandrell said LifeWay leaders have been working for months, even prior to the pandemic, to replenish reserves and free up capital to invest in strategic areas of focus.

In August 2019, LifeWay sold its distribution center in Lebanon, Tenn., for $20.1 million and is leasing back the warehouse and distribution space. LifeWay also will begin a feasibility study of its corporate office building in downtown Nashville. This could result in leasing several floors to external occupants, selling the building and leasing back office space, or moving to another location, Mandrell told employees in an April 13 email.

Employees moved into the 277,000-square-foot, debt-free building in November 2017. LifeWay sold its former campus and property for $125 million and spent approximately $100 million for land, construction, furnishings and relocating to the new campus.

No decisions have been made about the corporate headquarters. It could take several months or longer before a recommendation is made to the board of trustees, according to Mandrell.

Mandrell said he and the executive leadership team had begun redefining LifeWay’s mission and asking what churches really needed from LifeWay before the COVID-19 crisis hit.

“This situation has only helped to clarify the purpose of LifeWay moving forward as we seek to come alongside church leaders,” Mandrell said. “The time has come for LifeWay to make bold moves to prepare for future ministry. This temporary trial does not change our mission; it merely sharpens our focus.”

Carol Pipes is director of Corporate Communications for LifeWay Christian Resources. 


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