WASHINGTON (Reuters) - Republican Jeb Bush's struggling presidential campaign is cutting salaries across the board and reducing staff in a money-saving effort intended to concentrate resources on early voting states, an internal memo said on Friday.
The memo, seen by Reuters, said payroll costs were being slashed by 40 percent and staff at the campaign's Miami headquarters drastically cut back with some workers offered positions at reduced pay in states that vote early in the nominating process, such as New Hampshire, Iowa, South Carolina and Nevada.
The move follows a dramatic fall in Republican voters' support for Bush's attempt to secure his party's nomination for the November 2016 election and to become the third member of the famous Bush family to win the White House.
"We are making changes today to ensure Jeb is best positioned to win the nomination and general election," the memo said.
Once considered the heavy favorite for the nomination, the former Florida governor is running far behind poll leaders Donald Trump and Ben Carson in national polls and in Iowa and New Hampshire, the first two states on the 2016 election nominating calendar.
Now, Bush is facing questions as to whether he has the ability to remain a viable candidate. A key test will be next week when he appears on stage with his rivals at the third Republican debate, in Boulder, Colorado.
Appearing at a forum on Friday at Regent University in Virginia Beach, Virginia, Bush was asked by moderator Pat Robertson whether the cost-cutting was aimed at making his campaign leaner "or does this mean you're in trouble?"
"This means lean and mean and means that I have the ability to adapt," Bush said. "I have not met a person who thought Donald Trump would be the front-running candidate at this point. God bless him for his success in that regard. We'll see how long it lasts. But you have to adapt."
In a poll of likely Iowa Republican caucus participants released on Thursday by Quinnipiac University, retired neurosurgeon Ben Carson led the Republican field with 28 percent support, followed by Trump at 20 percent. Bush was tied in sixth place with former business executive Carly Fiorina with 5 percent.
Bush's move to reduce expenses comes a month after the departure from the race of Wisconsin Governor Scott Walker, who ran out of cash.
"If you do the right thing about budget cuts at the right time, they don't necessarily affect your chances," said Republican strategist Charlie Black, citing the examples of Ronald Reagan in 1979 and John McCain in 2007.
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Bush's heavy policy focus has shown him to be among the more serious candidates in the Republican field, but he has often been drowned out by Trump's bombastic rhetoric and has lacked the polished communication skills of rivals such as U.S. Senator Marco Rubio of Florida.
Bush announced last week that his third-quarter fund-raising was $13.4 million, a competitive sum but not enough to finance the large campaign operation he had built. As of last week he had $10 million in cash on hand.
"It's no secret that the contours of this race have changed from what was anticipated at the start," the memo said.
The Bush campaign also sought to reassure donors who have started to doubt that their candidate still has a path to the nomination.
Bush and his senior aides are staging a two-day donor retreat in Houston on Sunday and Monday that will feature appearances by his father, former President George H.W. Bush, and his brother former President George W. Bush.
The retreat will give donors a sense of where the campaign stands now and what is planned for the next 100 days, an aide said.
The staff deployments from Miami will have a special focus on increasing the Bush presence in New Hampshire. Bush will make more trips to the early voting states as well.
"We are unapologetic about adjusting our game plan to meet the evolving dynamics of this race to ensure that outcome," the memo said.
The cost-cutting moves were welcome in the Bush donor community, where there have been concerns about his prospects.
"I particularly appreciate that this strategy shift was quick, strategic and bold. As a donor, I am thrilled to see the campaign focus the lion's share of resources on voter contact and this will redirect energy to early states," said Slater Bayliss, a Florida lobbyist who is bundling donations for Bush.
(Additional reporting by Ginger Gibson; Editing by Paul Simao and Frances Kerry)