The University has begun laying off employees, part of its efforts to reduce costs to cope with the projected 30 percent decline in the value of the endowment.
The University announced this morning that it would begin laying off 275 employees and reducing the hours of 40 other employees or limiting them to an academic-year work schedule. Although the total number of layoffs and reductions is relatively modest compared to Harvard's total workforce--there were approximately 12,950 full-time-equivalent non-faculty staff members as of last October--the symbolic import of a large, stable employer like Harvard resorting to such actions surely looms larger.
In a note e-mail to the community, President Drew Faust cited other actions to cut costs--a salary freeze for faculty members and non-union staff, a voluntary early-retirement program (531 staff members took the incentive program; see further details at "Early-Retirement Program and Other Cost-Cutting Measures")--but said, "[W]e nevertheless have more we must do." Noting the relatively modest scale of the workforce reduction, she called the action "nonetheless painful for the people directly affected, as well as for our community as a whole."
A more detailed letter from Marilyn Hausammann, vice president for human resources, said that about half the positions eliminated are administrative or professional jobs, and most of the rest involve technical or clerical work. Service and trade employees are largely unaffected, she wrote.
The layoffs will be announced in most of the professional schools first; they will be followed by reductions in the Faculty of Arts and Sciences (FAS), Harvard Medical School, the central administration, and several allied institutions next week. Affected employees are being offered 60 days of pay from the time of notification; lump-sum severance payments of one to two weeks per year of service; an additional four weeks of pay; and the opportunity to purchase health benefits for 18 months (including the first year at subsidized rates).
The layoffs and reduced hours affect about 2.4 percent of Harvard's non-faculty workforce; the earlier retirement program reduced the staff employee count by 4.1 percent. The faculty ranks have not been affected by either action. (The faculty census numbered 2,325 full-time equivalents in the fall of 2007, the last published figure, including lecturers, visiting professors, and others; faculty appointees in the affiliated hospitals are not included in that total.)
When combined with other moves to cut expenses, such as the salary freeze, limits on hiring, slowing the pace of Allston construction and other capital projects, and so on--all driven primarily by the projected 30 percent decline in the value of endowment assets--these staff-workforce reductions will make an impact on the looming budget pressures in several of the schools and allied institutions. But they do not nearly close the biggest gaps, such as the $220-million deficit looming over FAS. As reported, FAS had identified just $77 million of the expense savings it anticipates needing to make; presumably whatever staff reductions are being announced now within FAS were counted as part of that initial $77 million of cuts, leaving $143 million in costs still to be removed from the core academic budget.
For coverage of community concern about the prospect of layoffs, and student opposition to workforce reductions, see "Looming Layoffs." For complete coverage of the University's financial straits, see the "University Financial Crisis" site at the Harvard Magazine homepage.
Here are the full texts of the statements by Faust and Hausammann:
As all of you know, this past year has created a set of extraordinary financial challenges for our university as it has for others. I am grateful for the continuing efforts made by people across Harvard to confront these new realities with thoughtfulness and care, and with an emphasis on sustaining the strength of our core academic programs.
With compensation accounting for so high a proportion of our budget, we will enter the 2009-10 academic year with salaries held flat for faculty and exempt staff; we have also offered a voluntary early retirement program in which more than 500 staff members across Harvard have chosen to participate.
While these actions have helped us reduce expenses, we nevertheless have more we must do. In the coming days, Harvard's Schools and units, as well as its central administration, will be carrying out a reduction in the size of our workforce - modest in comparison to the overall size of our University-wide staff, but nonetheless painful for those people directly affected, as well as for our community as a whole. Most of the Schools will carry out the process this week; the Faculty of Arts and Sciences, the Medical School, the central administration, and several of the allied institutions will follow, beginning on June 29.
Such decisions, in their human dimensions, are among the hardest that an institution like ours can make. But difficult circumstances have called for difficult decisions across the University.
As we proceed through this complicated transition, I want again to express my appreciation to all of you for your dedicated efforts on Harvard's behalf. A letter from Marilyn Hausammann, our vice president for human resources, explaining more about the planned reductions, appears below.
I am writing to let you know that most of the Schools, allied institutions, and units in the central administration at Harvard will be carrying out a reduction in our workforce over the next seven business days.
The size and scope of the reductions will vary across the Schools and units, but when taken together these changes will result in the elimination of approximately 275 staff positions. About 40 more staff members will be offered positions with reduced work hours or an academic year schedule. Deans at the affected Schools and department leaders will be communicating directly with their staff members about the changes taking place in their local communities over the coming days.
We regret the impact this will have on the lives of our valued colleagues. This decision was driven by the financial challenges facing the University after a projected 30 percent drop in our endowment, as well as pressure on other revenue sources, and it should not be allowed to diminish the many contributions made by these staff members during their time with the University.
Over the past six months, managers across the University have scrubbed their budgets for non-personnel savings, canceled or curtailed travel, and limited other discretionary spending. We have slowed development in Allston, strictly limited hiring, and reduced our reliance on outside contractors. We have held salaries flat for the coming year for our faculty and exempt staff, a move affecting more than 9,000 individuals. And the Voluntary Early Retirement Program that was offered to about 1,600 employees attracted more than 500 participants.
These steps have helped to keep the number of involuntary reductions as small as possible. Unfortunately, further cuts are needed in order for Harvard to adjust to the institution's new economic reality.
About half of the positions eliminated are administrative or professional positions, and almost all of the remaining ones are clerical or technical jobs. Service and trade workers will be largely unaffected.
The University is taking a number of steps to support staff members facing layoffs. These include:
- 60 days of pay from the time of notification,
- lump-sum severance of one to two weeks of pay for each year of service,
- enhanced severance benefits that include an additional four weeks of pay, and
- the opportunity to continue medical and dental benefits for 18 months, with a full year at subsidized rates.
Employees will have access to information about their benefits in individually prepared materials, on HARVie, and at a special walk-in Employee Support Center.
Administrative/professional and non-union employees wishing to begin a new job search are eligible for outplacement services and employment coaching. Harvard case management will be provided for HUCTW members. And, effective immediately, Harvard will institute a 30-day external hiring freeze for staff jobs to focus our efforts on matching qualified internal candidates with current job openings. I know that this is difficult news both for our colleagues whose positions are being eliminated and for those of you who will miss working alongside them. I think it is important to note that all of the steps that we have taken to reduce spending over the past six months have been taken with the aim of sustaining the academic and organizational capabilities Harvard will need for the future, while minimizing the impact on our workforce.
To those of you who are directly affected by this reduction in force, please know that we will do everything we can to make your transition as smooth as possible.
And to the entire University community, please know that we appreciate your dedication in this challenging time. With your help, Harvard will continue to be a vital and engaging place to work.
Vice President for Human Resources
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