I'll play Devil's Advocate on this and advise that EVERY company is doing what the WT is doing, slashing costs, cutting operations etc...it's the way of things at the moment...very few companies are actually in growth to the extent pre-world recession.
Whilst the WT has to slash costs because of factors Cedars mentions they are not the sole factor...I work in the publishing industry and the entire publishing industry is struggling with many publishing companies slashing costs or outsourcing departments...
I think to look at the decline of the WT in terms of them closing branches or cutting costs as as sign that they themselves are in decline is not entirely true, the WT, is in effect, a publishing company as the cost to print soars (ink and paper are going through the roof) then the WT simply has to do what all other publishing companies are doing and cut costs.
Of course, other publishing companies don't have to worry about falling donations or child abuse compensation...