Posted on 05/07/2020 7:01:07 AM PDT by fluorescence
Harvard University is preparing to cut more expenses as revenue losses deepen due to the Covid-19 pandemic.
The university reported a $415 million revenue loss in fiscal year 2020, and it projects a $750 million shortfall from original budget plans in the next fiscal year, which begins July 1. Those projected losses are causing university officials to consider furloughs and layoffs, Harvard said in a Tuesday letter to its community.
The university announced initial cost cutting measures last month, including salary freezes for all faculty and exempt staff, a university-wide hiring freeze, deferring or canceling all discretionary spending, a review of all capital projects to determine which ones can be deferred and voluntary salary reductions for senior leadership.
“As we look forward to the late summer and fall, I am compelled to underscore that the university is facing significant financial challenges which will require difficult decisions in the coming months,” said Katie Lapp, Harvard’s executive vice president. “Given the magnitude of the financial losses the university has sustained and the projected loss of revenues, it is clear that additional cost saving measures will be needed in the coming months including the possibility of furloughs and layoffs of some members of our workforce.”
Harvard has a $41 billion endowment, though 80% of those funds are restricted for specific uses set by donors, including scholarship and particular projects.
Lapp said that while Harvard has “some capacity to absorb temporary losses,” it is taking “necessary steps in some areas to adjust to what is likely to be a new normal.”
Decisions on furloughs, layoffs and other cuts "are not ones we would make lightly, and we recognize will only add to the uncertainty and difficulty this public health crisis is causing for every member of our community,” Lapp said.
Harvard previously said it would guarantee pay and benefits through May 28th to directly employed staff and contract workers, including those who provide dining, custodial, and security services. The school said Tuesday it would extend that pay and benefits guarantee to workers for an additional month.
The university's $415 million revenue loss this fiscal year includes refunding room and board for the last half of the semester after the school moved to remote learning, in addition to providing moving, travel, and other financial assistance to students. It also includes canceling in-person continuing and executive education courses and programs, and the loss of funding from federal and non-federal sources due to the closure of labs.
"While no decision has been made at this time, we will make every effort to limit the extent of any workforce actions," Lapp said. "However, faced with the significant disruptions to normal activities, we have a responsibility to act to preserve our core mission of teaching and scholarship."
Harvard officials said in late April they are preparing for a scenario that involves all, or nearly all, learning to occur remotely in fall 2020.
Awwwwwww! Guess someone doesn’t want to dip in to the endowment fund?
This is a point many folks don't understand. A lot of these endowments don't really belong to the school. Restricted endowment funds are effectively set up as "conditional donations," and the money can be demanded in return by the donors if the conditions of the donations aren't met.
Harvard can reach into it’s $40 BILLION dollar endowment fund. Morons.
Note to Harvard: Better spend what you can from that endowment before Congress gets its paws on it. If you’re thinking you’ll be eaten last, you’re in for a big surprise...
Enact tort reform and loser pays.
Then watch law school revenues plummet.
Hey, Harvard....all those Left-wing Social Justice professors are not “Essential.”. Harvard’s best decades had none of them.
So many colleges reporting this when they all received money for services not rendered (dorm rooms, fees, etc.). Must be trying to drum up a bailout.
What's essential and what to cut.
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Harvard has a $41 billion endowment, though 80% of those funds are restricted for specific uses set by donors, including scholarship and particular projects.
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Yep, ‘hurting’ w/ that ~$8B NON-restricted endowments fund *rolls eyes*
$750M shortfall for Harvard, huh. That’s $25M more than the budget shortfall for the state of Ohio.
Only the state of Ohio doesn’t have $41B set aside in an endowment.
Poor Harvard! Maybe build a new Confucius Center?
You know what would be DELICIOUS here. Send Sen. Warren a bill for the now disproven claim of having American-Indian ancestry in her Harvard credentials.
FUN!
About 20 years ago, Princeton had a Canadian female president.
Somebody set up an endowment for a Western Civilization chair. At least $25M.
She spent the money on everything but Western Civ.
When Larry Summers was Harvard president, he was spending money like Nancy Pelosi and Chucky Schumer.
The endowment funds managers warned Summers and the “trustees” (Harvard calls them “overseers”) about the coming downturn in the economy, but capital spending continued unabated (college presidents’ disease: Desire to build edifices to themselves using OPM), and Harvard had to hit principal.
Obviously that impacted the funds managers who were compensated on income since they then had less principal to generate income.
Or lose 6 figure salaries.
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