Peabody Essex Museum cuts staff by 15% as pandemic freezes out revenue

The Peabody Essex Museum opened a new 40,000-foot wing in September. On Wednesday, the museum announced layoffs for 38 of its 260-member staff.David L. Ryan/Globe Staff

The Peabody Essex Museum has cut its workforce by 15 percent, citing a projected $6 million revenue loss this year due to the protracted coronavirus crisis.

In a statement, director Brian Kennedy expressed “deep regret that these layoffs are now necessary.” According to Wednesday’s announcement, jobs have been eliminated for 38 of the museum’s 260 permanent employees. Senior staff earning more than $110,000 per year will also see their pay cut between 10 and 25 percent.

PEM, like every other institution forced to close as the pandemic deepened, has been without earned revenue — meaning ticket sales for museum admissions and events as well as retail sales — for four months, ever since the downtown Salem museum was closed indefinitely on March 12. Museums rank among the sectors hardest hit by coronavirus shutdowns, shedding 26 percent of its workforce between Feb. 15 and May 15, according to the US Department of Labor. A UNESCO study showed that almost 15 percent of museums worldwide could close for good due to heavy financial losses in 2020.

At the outset of the crisis, PEM said it would hold the line on staff reductions, using cash on hand and income from its endowment, valued at $426 million, according to the nonprofit’s 2018 tax filings. It halted all construction and landscaping projects and focused on core operations to maintain its financial health. While investment revenue from the endowment provides as much as two-thirds of the museum’s annual operating capital, PEM has not drawn on the fund’s principal to cover its revenue shortfalls.

With help from the federal Paycheck Protection Program, the museum sustained full staffing levels for eight weeks longer than it otherwise could have, according to Wednesday’s announcement. As the crisis deepened, maintaining a full staff was “no longer sustainable,” Kennedy said in his statement.

In September, PEM opened a new wing measuring more than 40,000 square feet, at a cost of $125 million, bringing its total gallery space to a 580,000 square feet. The layoffs will shave the museum’s 2020 budget from $36 million to $30 million, or the equivalent of its budget for 2017. According to a spokesperson, PEM hopes to re-open in mid-July.