WU places 1,300 employees on furlough pending final decision about fall semester
Facing revenue loss and an uncertain fall semester, Washington University began the process of furloughing approximately 1,300 employees this week.
Affected employees will be given up to 90 days of unpaid time off from work. The University will continue to provide health insurance to furloughed staff members. Certain campus administrators, including the chancellor, will also take voluntary pay cuts between 15% and 20% for the 2020-21 fiscal year, faculty and staff were informed in an email, April 20.
“It is our fervent hope that virtually all of these individuals will be back,” Executive Vice Chancellor and Chief Admin Officer Henry Webber said. “The key question about that is how close we are to not being operated in fall. And we fervently hope that we are at full operation.”
Sam Fox Dean Carmon Colangelo also emphasized the University’s intention to bring back all affected staff members, pointing out that their work is greatly valued.
“Understandably, there was sadness and disappointment, and worries about the uncertain future,” Colangelo wrote in a statement to Student Life. “But I am optimistic that we will bring our staff back together to start classes in whatever form this fall semester.”
The University projects a revenue loss of $175 million by the end of the fiscal year due to the COVID-19 pandemic. $25 million has been allocated to the Danforth Campus for refunds of housing and dining fees, shipping costs for student belongings and other miscellaneous costs. The remaining $150 million comes from the School of Medicine, which has suspended all elective procedures and other unnecessary procedures unrelated to COVID-19.
“We must now face painful realities as we continue to navigate this evolving situation. Even for an institution like ours, with a strong financial foundation, this crisis is taking a huge toll,” Chancellor Martin wrote in the email.
Webber agreed, citing that this is an unusual time in history.
“In many ways this is unique,” Webber said. “I don’t believe that we have faced this degree of financial pressure.”
Because of this significant loss in revenue, administrators plan to balance the budget and avoid further furloughs by cutting costs when possible. In his email Chancellor Martin announced plans to create a group to “review opportunities for cost savings” in areas including travel expenses, memberships and sponsorships and the use of outside consultants. Additionally, the University has frozen hiring on the Danforth campus and the central fiscal unit, frozen non-clinical positions on the Medical Campus, delayed or eliminated non-essential capital projects and further reduced spending for the near future.
According to Professor of Economics Gaetano Antinolfi, the departments only get to suggest one or two staff members who are essential to the workings of the department. Everything else is decided by the central administrators.
“I think that all departments can do is, at the margin, suggest how to, if there are activities that would make the life of their department very difficult over the summer,” Antinolifi said. “The size [of the furlough] is decided by the central administration.”
Although unsure which staff members are being furloughed, Washington University School of Medicine Dean David Perlmutter said that he was proud of the multi-pronged approach the University was taking by drawing on the reserves, using the federal aid and implementing cost-cutting measures in addition to the furloughs.
The University has received $16 million for the Medical Campus and $6.4 million for the Danforth Campus from the CARES act. However, according to Martin, this funding will not be enough to offset the losses from COVID-19.
“While certainly significant, much of this funding is restricted for conditional use and in no way makes up for our losses,” Martin wrote.
Despite the size of the University’s eight billion dollar endowment, Martin indicated that restrictions on the usage of the endowment make it difficult to put those funds to use.
“We do have a significant endowment, and we will distribute as much as is deemed prudent from this fund to address the current need,” the email said. “However, the reality is that the endowment is also highly restricted, with guidelines in place to ensure our long-term stability in order to provide a secure future for the university for generations to come.”
Additional reporting by Matthew Friedman and Danielle Drake-Flam