[dlemire]

Perhaps instead of trying to cut their costs, their best hope going forward is to keep their prices and profits high, and use the proceeds to fund some new completely independent "startup" journals to achieve their admirable original goal? And perhaps dedicate what they can of their current team to developing software and processes that others can use to run a lower-overhead journal?

There are highly successful super low-overhead journals that do not advertise, do not pay 6-figure salaries. See http://www.jmlr.org/ for example.

If you receive a 300k$ a year grant, then $1k per paper is 0.3% of your budget. And it is not uncommon for medical researchers to get a lot more than 300k$ a year.