In response to a host of budgetary challenges caused by Covid-19, Willamette University is cutting its costs by about 10 percent, according to the Salem Reporter. Chief among these cuts are the layoffs of 37 employees, the furloughs of another 80, salary reductions and a temporary decrease in employees’ retirement benefits.
Willamette’s Board of Trustees adopted the proposed budget that included these cuts in their May 16 meeting.
The changes are due in part to the University’s increased financial aid budget, as well as recent blows to the University’s revenue, including the cancellation of on-campus summer programming, empty residence halls and the relatively small size of the first-year class beginning in the fall.
Despite these challenges, the University plans to reopen and continue in-person classes on schedule at the beginning of the fall semester.
University President Steve Thorsett said about 30 employees have been laid off. On May 22, the Salem Reporter published a story saying 37 employees were laid off. According to Thorsett, individual colleges and departments were responsible for reorganizing or eliminating some of their functions, and deciding which positions to lay off. Employees who have been laid off were notified of the decisions earlier this week.
The furloughed employees will not work for the months of June and July, but are expected to be able to return to work on August 1. Furloughed employees may be eligible for unemployment insurance and government benefits related to Covid-19, and the University will continue to provide them with health insurance.
Employee layoffs and furloughs will go into effect at the end of the month.
The Board also approved a progressive salary reduction for employees earning more than $35,000 a year. The first $35,000 an employee makes will not be reduced. Employees earning up to $60,000 will see a three percent reduction, those earning up to $200,000 will see a five percent reduction and those earning over $200,000 will see a 10 percent reduction.
“One thing we tried to do was a balanced approach, so that everybody saw some piece of the pain, but that biggest financial hits were for the highest-paid employees, and we minimized, as much as we could, the number of people who were laid off,” said Thorsett.
The University has also temporarily reduced employees’ retirement benefits. Before the budget passed, the University contributed 10 percent of an employee’s annual salary to the employee’s retirement account. The current budget offers employees five percent. After seven months, the contributions will return to 10 percent.
Faculty members will not be laid off or furloughed, but they will be subject to pay cuts and reductions in retirement contributions.
The University is making efforts to decrease the number of new employees being hired, although a full hiring freeze is not in effect. Fewer visiting faculty members will be hired for the year, which has deans’ offices scrambling to make necessary adjustments to fall class schedules. Some positions are being filled, such as the recent appointments of Lisa Landreman, vice president for student affairs and dean of students, Brian Gallini, dean of the College of Law and Eric Roberts, the Teppola Presidential Distinguished Visiting Professor for the computer science department.
As Americans grapple with the economic hardships caused by Covid-19, many students and their families have a greater need for financial aid. For this reason, Thorsett said, Willamette made the decision early on in the pandemic to increase its financial aid budget, which set constraints around the rest of the University’s budget.
According to Thorsett, many other universities are facing similar financial challenges.
“The last number I saw was that one in five Americans has lost their job,” said Thorsett. “The people that [American universities] are serving can’t afford to pay for the cost of the higher education that we’re providing. We have to try to figure out how to bring costs back down to match what people can afford.”
The hope is that the campus will be able to reopen on schedule in the fall. In the upcoming weeks, University officials will communicate potential changes to the semester, in accordance with public health guidelines.