Hundreds of jobs are expected to go at the University of Otago as the institution says "salary savings" will need to be a major part of dealing with a $60 million hole in this year’s budget.
Acting vice-chancellor Prof Helen Nicholson broke the news to staff at a meeting on the Dunedin campus yesterday afternoon.
In a statement issued after the meeting, she said the staff cuts would result in changes across the entire university.
Applications for a first round of voluntary redundancies would open on Monday.
Prof Nicholson said she understood this was "clearly challenging and unsettling news" for staff and their families.
The university started the year with a deficit budget that required finding significant savings — and then student enrolment numbers came in below what the university budgeted for.
"If we do nothing, and even if our enrolments recover more quickly than we expect, at our current rate we will still have a budget in the red for several years.
Enrolments were down by 0.9% from last year.
International students were up by about 495, but domestic students were down by about 670.
Fewer domestic students were entering university and staying, and the university now projected the next three years of enrolments would be worse than forecast.
Additionally, there had been successive years of below-inflation funding increases from the Government, which was unlikely to be rectified in the upcoming Budget.
And, Prof Nicholson said, a recession was coming.
"What all of this means is that we are worse off today than we predicted in February, and we need a new plan."
Applications for voluntary redundancies would close on June 2.
A further round of redundancies was expected to follow.
"Several hundred roles are expected to be affected.
"The university’s capital programme will also be significantly impacted," she said.
A University of Otago staff member at yesterday’s meeting said it seemed many staff appeared not to appreciate the severity of the situation.
An attitude of "it’s not going to happen to me", and the university would be fine, seemed to prevail.
He did not share their views.
"I don’t think people have quite yet realised that this is a first-class financial crisis at the university.
"[Prof] Nicholson said if we don’t do something really quick, we’re going to run out of money. If we run out of money, it’s done.
"One of the things they said was that people will have to be off the payroll by December 31, 2023 — they clearly want everybody gone by the end of the year.
"I find it extraordinary that the university management have got us into the position that they’ve spent all the money — and it seems to have been largely spent on bureaucrats and buildings and management consultants."
Another staff member present yesterday said many were already reconciled to job losses and were "sort of expecting" the announcement.
He said the mood after the meeting was "somewhat sombre".
In a message to students yesterday Prof Nicholson said the university was reviewing "everything it does" over the next 18 months.
She also offered reassurances students would be able to complete qualifications and papers they were enrolled in "even if there are future changes to the papers and programmes we offer".
Otago Tertiary Education Union (TEU) organiser Philip Edwards said the news was "extremely disappointing".
Pursuing a voluntary redundancy scheme was a "scatter-gun approach".
"It will gut this university of institutional knowledge and mean that it will be a poorer place for it. It seems extremely problematic to us that the first university of New Zealand, and one of the best universities in New Zealand, is unable to weather the financial storm that Covid has put in front of them.
"Clearly there’s something that’s wrong with a funding model that would allow a university . . . not to fail, but to certainly experience such pain on the back of this global pandemic with fluctuations in student enrolments.
"What we will see here is a significant reduction in the number of papers offered, the choice available to students — and that’s a problem.
"You remove staff, you remove the paper offerings, you’re going to have a negative impact on both teaching and research.
"It’s a terrible day for the university and a terrible day for Dunedin."
Dunedin Mayor Jules Radich said the university was "at the heart of our city", and he offered support to all those affected by the announcement.
Universities New Zealand chief executive Chris Whelan said yesterday all eight universities were "seeing tough times ahead, with little real likelihood of major increases in student numbers or in government funding".
Nearly 80% of universities’ income comes from the Government — as subsidies for student tuition and research funding — or is controlled by the Government, in the form of tuition fees for students, he said.
The University of Otago’s website says the institution is one of the South Island’s largest employers, employing more than 4000 full-time equivalent staff.
