The University may be considering layoffs to help cut the $125 million deficit from its operating budget by the end of the 2011 fiscal year.
Executive Vice President Tallman Trask said the administration will probably not initiate any more large-scale, personnel programs to address the deficit in the near future. It is now up to departments throughout the University to adjust their expenses to meet their smaller budgets, he said.
Trask said for some of those units—from academic departments to administrative offices—meeting their smaller budget allocations could mean layoffs, particularly before fiscal year 2011.
“I do think there will be some units that do have to reduce their workforces,” Trask said. “I wouldn’t at all be surprised if some start doing things in anticipation of [fiscal year 2011]. The sooner they can find those opportunities, the better off they’ll be.”
Employees and their related expenses account for about two-thirds of the budget, he added.
“I believe that what the University is attempting to do is to be very strategic and systematic in the way we’re trying to reduce the workforce—it’s clear that we do have to reduce the workforce and we’re trying to manage that,” said Kyle Cavanaugh, vice president for human resources. “It is likely that we’re not going to be able to avoid [layoffs] in total, but we are trying hard to avoid that in the large scale.”
In April, Trask announced that Duke needs to shed about 1,000 jobs over two years.
Provost Peter Lange agreed that if there were to be layoffs, they would be decentralized in individual units.
The University has taken steps toward its 1,000-position goal and eliminated the equivalent of about 400 jobs through cutting vacated positions, reducing overtime hours and incentivizing 295 bi-weekly employees to retire, Trask said. He added that Duke has saved between $15 and $20 million through the programs.
In addition, the University officials sent a retirement incentive package to 198 monthly salaried employees Oct. 16.
Salaried employees have until Dec. 8 to accept or decline the package. Trask said he does not expect a high acceptance rate for the program because decisions will likely be based on individual financial situations. Rather than retiring to a steady pension plan like the bi-weekly early retirees, salaried retirees will receive one check.
It is also difficult to predict how much the salaried incentive could save the University due in part to the range of salaries included in the offer, Trask said. The average salary is just under $70,000, but the pool ranges from the $40,000s to six-figure salaries.
Cavanaugh said HR has been speaking with eligible employees frequently since the incentive was mailed out. The first group session that was held to answer general questions about the package was filled to standing-room only with employees and their families, he said.
“I think that there’s general optimism, but the situation is still a significant challenge to all of us, so it’s going to impact different people differently,” Cavanaugh said. “So if you were one of the individuals who is contemplating the retirement initiative, that is a very personal decision and we are trying to position people as best we can to make good, informed decisions.”