Approximately 60 Dartmouth staff members will be laid off in order to help the College reduce its compensation expenditures, the Board of Trustees announced on Monday -- the latest consequence of the economic crisis' impact on the College's budget.
The layoffs are one component of the College's "Budget-Reconciliation Plan," a plan spearheaded by College President James Wright and a team of administrators and released to the Dartmouth community on Monday. The plan was approved by the Board at its meeting this weekend.
"We jointly concluded that there would have to be some steps taken to bring expenses into line with the projected revenues," Board Chairman Ed Haldeman '70 said.
Wright and his team of administrators suggested layoffs as a last resort, Wright said.
The College sought to reduce employee compensation expenses through a variety of measures " including an early retirement plan, which freed up $1.5 million, and a hiring freeze, which opened up approximately 60 positions and saved $3.6 million, vice president for finance and administration Adam Keller said.
Dartmouth will also implement a salary freeze for the coming fiscal year, which begins in July, and will reduce the hours of 28 College employees, the College announced on Monday.
In the face of a worsening economic climate, however, layoffs were also necessary, Wright said.
"The positions are selected for being eliminated, not the people," Keller said.
The layoffs will affect all major divisions of the College, though departments with a higher percentage of their budgets designated for employee compensation will likely face more layoffs, Wright added.
"We are trying to handle this as well and as generously as we can because these are people who have always served us well," Wright said.
The College is offering laid-off employees a lump sum payment towards the full cost of maintaining health benefits for three months, career counseling, and special consideration for future College employment as positions become available. In addition, these employees will receive a separation package that includes two weeks pay for each consecutive year worked at Dartmouth, with a minimum of four weeks and a maximum of 52 weeks, according to a College press release.
Other components of the Budget-Reconciliation Plan include $35 million in budget cuts for the 2010 fiscal year, for a total reduction of $47 million by the 2011 fiscal year. The new figure includes the original $40 million in budget cuts previously announced by the College in November, Keller said.
The reductions will range from 4 percent to 13 percent across departments, with administrative divisions taking the largest hits, he added.
"We recognized that the economy is deteriorating, that our endowments were being impacted and that we needed to get that much savings in order to have a balanced budget," Keller said.
The $47 million in cuts will include savings projected from the facilities projects put on hold by the College, as well as from the salary freeze.
The current savings from temporarily eliminating raises will result in even greater savings in the future, Wright said, because raises are a percentage of the previous year's salary.
"We're confident that we've made a major effort that, unless things change dramatically, we will have accomplished a couple years' worth of bringing the budget into balance," Keller said.
The Board looked to make budget cuts that would not jeopardize the College's academic excellence and financial aid program, Haldeman said. Under the new plan, no tenure or tenure-track positions will be eliminated.
One-third of faculty searches in the arts and science are, however, being postponed, he said.
"We wanted to retain the great momentum that has developed in terms of faculty recruitment and retention and not cause that to suffer," Haldeman added. "That was one of our high priorities. We've made so much progress in the last 10 years in that regard we did not want to take a step backwards. The same is true about financial aid."
Provost Barry Scherr added that the College hopes to protect "the overall learning experience of our students."
"We really hold the academic experience and academic programs at the forefront of what we're all about and what we're trying to do," he said. "So, to the extent possible, that is the area we really do want to preserve."
Scherr qualified the budget cuts by saying there will be some reduction in service, but that the changes are largely "quantitative rather than qualitative."
"Certain administrative services that were available by going to one person, you'll now have to go to somebody else," Scherr said. "So, we're not taking away -- I think as far as faculty and students are concerned, the kinds of support that they've had before are still going to be there, but a number of cases there'll be less of it."
In other efforts to reduce budgetary spending, student printing subsidies will be halved from $40 per student to $20. The College is also reviewing several aspects of Dartmouth life, including BlitzMail, to save additional funds, Keller said.
"We're sort of looking at those with two criteria in mind," he added. "The first is, what's the potential savings? And the second is, how hard or easy would it be to do that?"
Dartmouth Medical School is currently in the process of developing a budget plan, and administrators intend to announce those decisions in the spring, Keller said. Dartmouth's graduate schools, which are less dependent on the endowment for funding than the undergraduate institution, are more protected from fluctuations, Wright added.
"The Tuck School [of Business] and the Thayer School [of Engineering] don't anticipate any staff reductions," Keller said. "The medical school is in the middle of its process right now."
Keller said Dartmouth is well situated to move forward.
"I think of us, all of us, as involved in sort of managing our assets," Keller said. "Our assets aren't just the endowment; they're the intellectual resources we have here, the faculty we have here, the students we have here, and the staff we have here. I'm confident that we're taking an approach, which really does the best we can with those assets."
Scherr added that when the economic recovery begins, the College will be able "to build on our strengths in the academic programs, to really try to enhance the overall learning experience on campus, and to make us a stronger institution."
