Facing a $250 million budget deficit, the University of Delaware on Thursday announced a number of cost-cutting measures, including layoffs and furloughs for employees.
"Given that we will have eliminated almost all discretionary expenses for this year, we have no choice but to turn to personnel actions," UD President Dennis Assanis said. "We are committed to balancing the respect and appreciation we have for our workforce with the need to respond to immediate financial pressures, while positioning UD for success in the next few years."
The exact number of layoffs has yet to be finalized, UD spokeswoman Andrea Boyle Tippett said. It will be determined in part by how many employees take an early-retirement incentive or voluntarily agree to reduce their work hours.
Each academic unit must cut 15 percent from their budgets, and non-academic units must cut 25 to 35 percent, Boyle Tippett said.
Beyond the layoffs, all 3,500 UD staff members will see furloughs.
The layoffs and furloughs will only affect staff members, not the university's approximately 1,300 professors, though Assanis said the university remains in talks with the American Association of University Professors, the union that represents faculty members.
The cuts come as UD continues to be hit hard by the effects of the pandemic.
The university has seen a 10 percent drop in freshman enrollment and a 5 percent reduction in the number of returning sophomores. Residence halls are only at 20 percent occupancy, representing a huge loss in room and board revenue, and there is no revenue coming in from athletic competitions and events, which have all been canceled.
UD has also seen added expenses due to investments in pandemic precautions, including testing, isolation spaces and other preventative measures.
Earlier this year, the university predicted a $168 million budget shortfall, but that was under the assumption that most students would return to campus this fall. After the university decided to take all classes remote except for a small number of labs and other specialized courses, the deficit grew to approximately $250 million.
“This budget gap presents a significant challenge. While we had already implemented belt-tightening measures for fiscal year 2020-21, the fluid and uncertain nature of the evolving situation forces us to now take additional austerity measures,” Assanis said. “The hard reality is that the financial difficulties facing UD – and all higher education institutions – are not a one-year event, and the road to recovery will extend over the next several years.”
The university is already looking toward challenges for fiscal year 2021-22 as well, including reduced ability to recruit new students, a continuing need to increase student financial aid and the uncertainties of the economic environment and state support affecting students and families, he added.
Approximately 60 percent of UD's $1 billion budget is personnel costs.
The university is using $100 million from its endowment to defray some of the added costs, but Assanis noted that's not a long-term solution.
“In total, the university is distributing more than 10 percent of the value of the endowment to help get through this difficult period; this level of spending is not sustainable,” he said. “The Board of Trustees is responsible for preserving the assets in our endowment to ensure the long-term success of the university’s education, research and service missions.”