Metropolitan Museum of Art Plans Job Cuts and Restructuring.

The Metropolitan Museum of Art is facing a deficit of $10 million this year. Credit Robert Wright for The New York Times

The last couple of years have been ambitious ones for the Metropolitan Museum of Art. Perhaps too ambitious.

Now the museum is acknowledging that it may have overreached and is facing a deficit of $10 million this year, which officials said would almost certainly balloon to as much as $40 million if the Met does not change course and scale back.

The museum opened its new Met Breuer space in the Whitney’s former building on Madison Avenue, which will cost $17 million each year to run. It selected an architect, David Chipperfield, to design its new $600 million wing for modern and contemporary art. And it reached a settlement in part of a long-running legal challenge to its admissions policy, agreeing to call its $25 full-admission charge “suggested” instead of “recommended.”

So the museum is changing course. On Thursday, it announced a 24-month financial restructuring that it said was likely to include staff reductions, slower construction of its new wing and reduced programming.

“We’ve had increasing pressure on the budget and knew that we were going to have to take actions to get it back in balance,” said Thomas P. Campbell, the museum’s director and chief executive.

Daniel H. Weiss, the Met’s president, said: “What we’re seeking here is ensuring financial stability for core programs and investing in the future. That’s the whole point of this plan, to make sure we can do both.”

The Met decided it was important to announce the plan, rather than allow news to dribble out through staff members, who were informed on Thursday morning. In March, just before the Met Breuer opening, the museum took a hit for shifting to its new logo without giving the public notice.

Mr. Campbell played down the severity of the restructuring, saying that such belt-tightening was cyclical — the museum has been through it before, including layoffs, most recently in 2009. He added that nonprofits often grapple with the gap that results when cost increases outstrip revenue growth.

In 2008-9, the Met had a significant deficit, as did many other institutions. For the past few years, it has been on the order of $4 million to $8 million, not including debt service.

Since salaries account for 70 percent of the Met’s expenses, the museum plans to reduce its head count over the next 12 months, Mr. Weiss said. He declined to specify a target number of cuts, except to say “it’s not hundreds, it’s dozens.”

The Met will also freeze hiring and request voluntary buyouts, after which it may resort to layoffs.

“If we do nothing — if we just carry on — 18 months from now, at the beginning of fiscal year 2018, the deficit would be four times bigger,” Mr. Weiss said. “That’s not O.K., so we’re going to take action to control that.”

The financial straits stem from several factors, the Met said: Retail revenue has declined (by $3 million to $4 million over the last year), salaries have increased, and the museum has to pay $8.5 million a year in debt service on $250 million in bonds issued for capital infrastructure work.

In addition, the Met’s growing population of younger visitors are paying less at the door, as are tourists. Though the Met has a hefty annual operating budget of $300 million, with annual attendance of 6.3 million, a decline of “30 to 40 cents per person is material,” Mr. Weiss said.

The Met also spent about $3 million on its recent branding effort as well as millions beefing up its digital staff over the last few years.

Daniel H. Weiss, the president of the Met. Credit Richard Perry/The New York Times

As to whether the Met Breuer is a leading cause of its difficulties, museum officials said that the Madison Avenue building’s operating and renovation funds came from philanthropic dollars, which will cover the duration of the Met’s eight-year custody of the site. Whether the Met wants — and can afford — to retain Breuer after that remains uncertain.

“The driver of this deficit is not related to Breuer,” Mr. Weiss said.

At the same time, the Met did incur some “indirect costs” at Breuer, Mr. Weiss said, namely training 110 staff members, some of whom were new hires.

In addition to cutting expenses, the Met will seek to build revenue by drawing new visitors, including groups and increasing restaurant proceeds. “Every revenue source we have to fight for,” Mr. Weiss said. “It’s a matter of optimizing the returns.”

While the museum’s exhibition program is “part of the DNA of this institution,” Mr. Campbell said, “we’re looking at whether we can slim down and spread out some of the program.” That could mean longer exhibition periods and fewer loans, which require high insurance costs.

The Chipperfield project — which calls for demolishing the existing Lila Acheson Wallace Wing in the museum’s southwest corner, increasing the gallery space and doubling the size of the Roof Garden — will “be quiet for a while,” Mr. Weiss said.

Having completed the schematic design phase, the Met will call a halt to the architectural process and concentrate on raising funds for the new wing, he added.

In terms of appearances, it will undoubtedly be difficult for the Met to raise money for a new building even as it is struggling to pay its own bills and to continue producing ambitious programs for the Met Breuer as it prepares to downsize the staff at its Fifth Avenue flagship.

But Met officials said that they believed these efforts at broadening its operations were important and sustainable. “In a perfect world, these two events wouldn’t be coinciding,” Mr. Weiss said. “But we’ll get through these challenges.”

Correction: April 21, 2016 

An earlier version of this article misstated the focus of the Metropolitan Museum of Art’s recent $3 million branding effort. It was for the museum as a whole, not the Met Breuer.

http://www.nytimes.com/2016/04/22/arts/design/metropolitan-museum-of-art-plans-job-cuts-andrestructuring.html