Light & Verity

Layoffs loom as budget cuts go deeper

Responding to what President Richard Levin called "the mounting evidence suggesting a prolonged recession," the university is making more-aggressive cuts in its 2009-10 budget than originally planned. The new targets will result in employee layoffs, salary freezes for higher-paid employees, and the indefinite postponement of a plan to build two new residential colleges.

In December, Yale had announced a 5 percent cut in spending on non-faculty salaries and an equivalent cut in all non-salary expenses. Administrators said they expected the cut in salary expenditures could be achieved largely through attrition. But on February 24, Levin announced in a letter to the campus that budgets would be reduced by 7.5 percent instead. Vice President for Human Resources and Administration Michael Peel says that such a reduction will likely result in about 100 layoffs, divided proportionally between managerial and professional workers, on the one hand, and clerical and technical workers on the other -- a total pool of about 7,700 employees. (Yale's 1,500 service and maintenance workers are largely protected from layoffs by their union contract.)

Levin also announced that most capital building projects, including the new residential colleges, were being suspended "unless gift funding is available." Levin had earlier said that the design work for the colleges would continue, leaving open the possibility that they could still be built and open by 2013 as originally scheduled. The new colleges would allow a 15 percent expansion in the enrollment of Yale College. (See Light & Verity, July/August 2008.)

Design work is continuing on the new School of Management campus, however, which has some funding in place, and the renovations of Morse and Ezra Stiles colleges will still take place in 2009-10 and 2010-11, respectively.

In his letter, Levin said that the investment office was still projecting a decline of 25 percent for the fiscal year. But he cited unemployment figures, mortgage and credit defaults, and the spread of the recession to Europe and Asia as evidence that "it will likely be some time before the endowment resumes its normal growth."  

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