Seattle Repertory Theatre, the state's largest nonprofit regional playhouse, will cut its 2009-10 budget by about one-third, operate with a four-day workweek and cut a day from its performance week, due to the financial crisis and a decline in season-ticket subscriptions.

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Buffeted by the sinking economy, a decline in subscription-ticket sales and an endowment it can’t draw from, Seattle Repertory Theatre — the state’s largest nonprofit regional playhouse — is taking some drastic steps, cutting its upcoming budget by one-third and going to a four-day workweek.

For the next fiscal year, which starts July 1, full-time staff will work 32 hours a week. The theater is also planning two fewer productions, doing more co-productions with other theater companies, presenting smaller-cast plays and cutting a day from performance weeks.

Together, the moves are intended to bring the Rep’s budget down from $10 million this season to about $6.5 million next season the smallest budget in a decade.

Though they’ve been mounting for more than a year, the Rep’s troubles are similar to those faced by many arts organizations locally and nationally.

“What’s unique is how we’re dealing with it,” said marketing and communications director Katie Jackman — in particular, a theater of this size going to a 32-hour workweek. “It’s fundamentally changing how we operate.”

Most of the 40 full-time, annual, nonunion employees — who work mainly in administration, marketing and educational outreach — will work Tuesdays through Fridays.

As for the union-represented seasonal staff, whose numbers vary from year to year and can get as high as 50 workers, agreements have yet to be reached.

The theater has asked three locals of the International Alliance of Theatrical Stage Employees (IATSE) to reopen contract negotiations.

Those three locals, which represent some 25 full-time seasonal stagehands, set builders and wardrobe crew at the Rep, would be most affected by the shorter workweek. Their current contracts provide for a 40-hour-minimum workweek.

Though they’re discussing the issue with the Rep’s management, they haven’t yet agreed to renegotiate.

In the past, the theater has asked for — and Local 15 agreed to — midterm-contract concessions, including forgoing pension contributions and cost-of-living increases, said Tara Heinecke, managing-business representative of IATSE Local 15.

“Nobody wants to see the theater go away. It’s not just a job, it’s a passion,” Heinecke said. Still, “something needs to change fundamentally in the way (the Rep is managed), if we have to keep doing this.”

The Rep’s troubles have been building.

Since 2006, the theater has seen a yearly decline of about 9 percent in subscription sales, said Jackman, noting that such sales have also declined in other theaters nationally.

Its endowment — which had been the envy of theaters with smaller or nonexistent endowments — has taken a beating in the stock market and has now dipped below the $14 million original principal, meaning the Rep can’t draw from it next season.

Having an endowment, which provided about $1.5 million to the 2008-09 budget, is double-edged, said managing director Benjamin Moore. “When you have income from it, it’s fabulous.” But it has allowed the Rep to build a larger operation that now needs to be cut.

The theater’s draft budget for next season also estimates that grants and donations will drop by about $500,000.

In addition, one day will be cut from performance weeks, which will run Wednesdays through Sundays, rather than the current Tuesdays through Sundays. (Previews, though, will still happen on Tuesdays.)

The Rep has already had layoffs and required its full-time employees to take a two-week furlough.

“We have to live within our means,” Moore said. “Everyone gets that. They know they have to make some personal sacrifices.”

Across the country, other regional theaters are also facing difficulties.

The Guthrie Theater in Minneapolis is cutting its budget by 14 percent and has asked unions for a salary freeze. Shakespeare & Company in Lenox, Mass., is laying off seven employees and instituting a 10 percent pay cut.

“It’s a tough, tough time for all of us. We’re just trying to hang on, be creative,” said Linda Jacobs, spokeswoman for Theatre Communications Group, a national organization for professional nonprofit theaters.

“It’s a really important time for theaters to be a part of communities because it’s a place for people to come together and feel united.”

Seattle Times theater critic Misha Berson contributed to this report.

Janet I. Tu: 206-464-2272 or jtu@seattletimes.com