Recession Response
Media Reports

New York Times
February 4, 2010
Yale, With $150 Million Deficit, Plans Staff and Research Cuts

By Lisa W. Foderaro

Yale University announced on Wednesday that it planned a number of steps to close a remaining $150 million budget gap, including cutting staff, freezing salaries for deans and officers, reducing the number of graduate students - even turning down all thermostats to 68 degrees.

In a memo to the faculty and staff, Richard C. Levin, Yale's president, and Peter Salovey, its provost, said the measures were necessary because of the drop in the endowment to $16.3 billion last June from its peak of $22.9 billion in June 2008.

"Actions taken last year eliminated more than half of the total deficit, but, as we communicated in the fall, a substantial gap of nearly $150 million remained as of last September," they wrote. "This gap needs to be closed for the next and subsequent years."

The memo did not specify how many staff positions would be eliminated. Last year, 100 employees, out of a work force of 9,200, were laid off because of similar financial pressures, and several hundred more positions were eliminated through attrition, said Tom Conroy, a Yale spokesman. Those cuts did not affect faculty positions; nor will the current round.

Laura Smith, president of Local 34 of the Federation of University Employees, which represents 3,400 clerical and technical workers at Yale, said the union would try to blunt the impact of any cuts on its members. "It's disappointing over all that the university feels it has to do more cuts," she said, noting that the union and Yale had reached agreement last April on a new contract with strong job security, eight months ahead of schedule.

The announcement said that support from the provost for a number of research and other programs would be "reduced but not eliminated." In addition, those earning more than $83,000 and who are on the Yale Health Plan will have to start paying for part of their coverage. The reduction in new graduate students, expected to be 10 to 15 percent, would save money, as most receive full tuition and a stipend.

Mr. Conroy said that Yale could not simply dip into its endowment. "First, the endowment is largely restricted to the purposes designated by donors," he said in a statement. "Second, you would simply be delaying the need to reduce expenditures to future years, because the endowment's annual payout would be lower in the future if even more of it were spent now."

Other elite universities in the New York region and across the nation have also had layoffs since the economic downturn.

At Cornell University, about 150 staff members were laid off through November, and another 432 employees took an early-retirement incentive. But 34 of the laid-off workers have been rehired for other jobs, said Simeon Moss, a Cornell spokesman.

At Princeton, a total of 43 positions were eliminated last fall as part of a broad initiative to reduce the operating budget by $170 million over two years. In addition, 145 employees took early retirement.