On Thursday (4/20 nice) the University of Otago sent out a shock press release announcing that several hundred academic and staff positions were going to be slashed. This came a day after the Uni also announced that the Bachelor of Applied Science programme was going to be discontinued, and weeks after Languages and Cultures had been whittled down as well.
Almost immediately, attention was brought to the $700,000 price tag on their new logo. But let’s make one thing clear: this is a lot of money, but it is just 1.16 per cent of the total deficit they need to make up. It’s literally pennies in comparison.
The University made it clear that no staff would be lost due to the BAppSci cuts. That relief period didn’t last long, as their all-staff email detailed that they didn’t expect voluntary redundancies to make up the total $60 million deficit. Their financial situation boils down to a few shortcomings, notably lower enrolment rates and rising inflation. They noted that the oncoming recession might not be all bad, though, because: “In some scenarios, a recession helps us. If unemployment grows, people turn to higher education.” But they reckon that this recession wouldn’t see too much unemployment.
Enrolment rates were one shortfall. At a staff announcement on Thursday, acting Vice-Chancellor Professor Helen Nicholson explained that student enrolments are down 0.9% this year compared to what the Uni had budgeted for: “Compared to final 2022 results, international students are up by about 495, but domestic students are down by about 670.”
But inflation was a problem, too. We understand that government funding has not kept up with inflation, meaning that this situation is not entirely due to University management. Government funding used to be the primary source of University cash, until the 1984 Labour Government introduced a fees-based model. You can read all about that in Annabelle’s feature this week, but basically it means that the University is sort of forced to operate like a business, meaning it expands and contracts based on how it performs. This is opposed to a funded model, in which the Government shores up any unexpected financial losses due to, say, a pandemic.
The University is opening applications for voluntary redundancies on Monday, April 24. However, they do not anticipate that the workforce will reduce enough through the voluntary process and therefore several hundred staff will be cut over the next 18 months. And this isn’t the first time - in 2021 the Uni offered just over 100 staff voluntary redundancy. A University spokesperson said that this time, however, “we face a different and worse financial issue” meaning “more job losses are needed.”
Professor Nicholson said, “We need to reduce our annual operating budget by about $60 million and salary savings will need to be a significant component of this.” Upon hearing the news, one postgrad wondered how many staff members could be hired with the Vice Chancellors salary, “because we know [the Clocktower’s] not taking any cuts.” This might not be true, though, as the announcement said that staff cuts will be both academic and professional, even if the recent Support Services Review showed that, in the words of one alumnus, “there is little fat in the professional services.”
“If we do nothing,” Nicholson said, “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. That is not tenable for us as a university.” Professor Nicholson was empathetic to those who would be affected by the news: “This is not a decision taken lightly. We know that this affects staff, their families and our community.”
Students were reassured again, however, that they needn’t worry about these changes affecting the qualifications they are currently enrolled in. One of our reporters collected students’ thoughts on which degrees they thought would be most impacted by the changes. While students agreed that “all are important”, most were pretty confident that the health sciences and data sciences would be safe and agreed that “it would probably be something in the humanities, but who knows?”
A media release sent by the Uni said that a strategic plan is in the works laying out the steps they will have to take over the next seven years to “put it firmly on the path to 2040.” Another all-staff forum is set to be held in about six week’s time to outline the plan, decisions, and next steps. In the meantime, who volunteers as tribute?