"We will be taking particular care to ensure that the needs of currently enrolled students are taken into account," Prof Skegg said.
He also named the department of social work and community development, in the university humanities division, as one of four areas reviewed by an Otago University task force established last year.
It is the first time the university has announced to the general public the department was part of the review.
The other areas are the design studies department (sciences division); the department of accountancy and business law and the department of finance and quantitative analysis (School of Business); and the College of Education.
It is understood one option being considered is for the social work department to be brought together with sociology and gender studies - currently part of anthropology, gender studies and sociology department - to form a new department.
It is also believed the social work department is being cross-subsidised from elsewhere in the humanities division by about $300,000 a year and that about three academic jobs could eventually be cut.
The department has about 10 full-time-equivalent staff.
Approached for comment about future restructuring, the cross-subsidy and possible staff cuts yesterday, university officials said no decisions had been made about the department and it was too early to comment.
Prof Skegg said that, in some of these areas, the possibility of merging parts of existing departments was under consideration.
No final decisions had been made, and it would be premature to comment in any detail on implications until the consultation and decision-making processes were completed.
"Naturally, this is a very unsettling time for staff in the four areas concerned, and all of us feel sympathy for those affected."He had assured the university Senate, the university's main academic body, that, apart from those four areas, he expected "no further academic restructuring for financial reasons will need to be contemplated" this year or next year.
The task force, which had been convened by the previous academic and international deputy vice-chancellor, Prof Gareth Jones, had suggested a wide range of measures for reducing costs and achieving efficiencies.
Some reductions in staff numbers also had to be considered.
When the task force was established, Prof Skegg noted academic priorities "should be paramount" and the university's "areas of greatest strength" must be supported.
The task force had considered options for dealing with the financial challenges faced by all New Zealand universities, including Otago, given that some government funding would be reduced from next year onwards.
Rather than imposing cuts across the whole university, it was decided to confine academic restructuring to four areas which had required "significant and continuing cross-subsidies" from other departments.
Among New Zealand's eight universities, Otago was the only one that had had "virtually no academic redundancies" during the past six years.
Most other universities had had "exercises of this kind on an annual basis".
The Otago social work and community development department has about 186 equivalent full-time students, comprising about 114 undergraduates, and the rest postgraduates.
