University may cut more staff

With a $100 million gap left to close in the University’s budget, Yale administrators are considering budget cuts that may lead to more staff reductions.

In a series of meetings that ended last week, University President Richard Levin and Provost Peter Salovey reassured faculty and staff that the endowment is on its way to recovery, even while they warned of further budget cuts. But in a departure from the University’s previously stated philosophy, the administration is considering offering enhanced retirement incentive packages for faculty, Levin said.. Among other options under consideration is the expansion of the number of academic summer programs that pay Yale to use its resources. But even with these strategies, resorting to turnover or layoffs to eliminate positions may be unavoidable, administrators said.

“It’s hard to imagine that we will be able to close that kind of gap without fewer staff,” Deputy Provost Charles Long said.

Since the endowment’s 24.6 percent tumble between June 2008 and June 2009, Yale has delayed faculty hires, laid off about 100 staff, suspended most construction projects and eliminated many other expenses throughout the University in an effort to save money. These measures, which began in the fall of 2008, have recovered $250 million out of the initial projected gap of $350 million, but the University still has a ways to go.

But now that the largest and most obvious cuts — such as halting most construction projects, which alone saved the University $100 million — have been made, the remaining $100 million will be more difficult to find, Levin said in an interview last week. Salovey said the remaining cuts must be achieved by finding “little pieces.”

“If you can find 100 ways to save $1 million, that adds up to $100 million,” Salovey said. “Of course, there may not be 100 ways.”

The University’s budget committee, composed of faculty and administrators, is meeting monthly to generate ideas about how to cut back and generate extra revenue, Salovey said.

Asked if further layoffs might be coming, Salovey said administrators are considering personnel-related budget cuts. About 50 percent of the University’s operating budget goes to fund personnel-related costs, he said.

“It’s impossible to close a gap of $150 million and not look at people,” he said, referring to the deficit at the beginning of the year, before administrators cut another $50 million. “But in doing so, there are lots of different options.”

Among those options, Levin said, is enhancing retirement incentives for Yale employees.

Though the University has offered retirement packages to tenured professors since 1993, when it eliminated its mandatory age-based retirement policy, administrators last year said they were leaning against offering retirement incentives for a variety of reasons. For one, Salovey said in February, retirement incentives often enticed people not targeted by the packages.

But now, the University is taking another look at the retirement policy. Long said Tuesday that retirement could become more financially appealing if incentives are offered.

“If people enjoy what they’re doing, and are doing it well, there’s no reason to make anybody leave,” Long said. “If someone is staying simply because they’re concerned about income, we can make the retirement package a little more attractive.”

Yale’s consideration comes as Harvard announced last week that it would offer retirement packages to 180 professors.

Retirement incentives or not, the Provost’s Office must decide how either to raise more revenue or to eliminate more costs in January. The office will finalize the balanced budget for the next fiscal year by March or April, Salovey said.

Some departments will be able to pay their bills by finding “creative” ways to put restricted funds to use, he said. Many University endowment funds can only be spent for specific objectives, such as conducting research in particular fields, which donors specify when they make contributions to Yale. But the University will re-examine those funds to see whether donors’ stipulations can be interpreted more broadly to be put toward priorities such as faculty development and student financial aid, Salovey said.

Administrators are also asking individual departments to make further cuts similar to ones already made in two previous rounds of budget cuts by squeezing out research initiatives, social events, office supplies and any other non-essential expenses, Long said. Anywhere from $25 million to $40 million in savings will come from these “little tweaks,” Salovey added.

To produce more revenue, administrators are also considering bringing to campus more summer programs, such as the independently operated academic programs the University already hosts for high school students. There is a demand for pre-college, as well as professional, classes taught by Yale faculty, Salovey said.

Still, he was quick to add that neither the summer programs nor the retirement incentives have become definite plans.

And all of the current budget projections rest on the assumption that the endowment will begin to recover. Though he warned of further cuts, Salovey offered good news: The University’s endowment has recovered slightly, he said, though he said he does not know the exact amount because it often changes and his office has not taken an official tally since the fall.

“There’s a lot of uncertainty, and the recovery could be rocky,” he said. “At the same time, I think we’re all hopeful this suggests the worst is behind us.”

In the meantime, administrators hope to make budget decisions with the input of faculty and staff, Long said. The deputy and associate provosts are still meeting with deans, department chairs and program directors.

Comments

  • veteran staff

    How about early retirement incentives for staff as well as faculty? I, for one would seriously consider it.

  • anonymous

    I agree with #1 Veteran Staff. The Harvard C&T’s were offered an early retirement incentive package last year.

  • rich

    It’s cheaper to keep you guys working and lay off others. Nice try though…Get back to work!