Vice-chancellor Prof Harlene Hayne made the comments during an internal briefing at a recent staff forum, which was reported on the university's Otago Bulletin website.
She told staff the three main threats to the institution were flat funding for humanities and commerce, the regional location of its main campus and overall student numbers.
''We have made it harder to get into Otago, and easier to get yourself excused. I make no apology for these decisions whatsoever.''
It had become ''more academically elite'' as a result, which meant more students wanted to come to the university.
''For the last few years, our first-year numbers have been up.
''At the same time, however, we are still working through a decline in numbers due to the tightening of our academic progress policy,'' she said.
She went on to ask for help from staff as the university faced tight times.
''I can't see that the constraints on our budget will improve any time soon, so I need you to help us to find ways to do more with less.''
The university needed to find alternative funding sources and build partnerships with other research organisations and businesses.
''There are a great many professionals around this university who see problems as a challenge, not a catastrophe.''
Prof Hayne also spoke of the university's achievements, including consistently ranking in the top 1%-3% of universities in the world and meeting the Government's priorities, including on the performance of Maori and Pacific students.
''[It] turns out the Government's priorities and Otago's strengths are highly consistent which means that we do not have to radically change what we are doing in many areas.''
