275 Layoffs Announced!

This letter was sent to Harvard Staff today from President Drew Faust:

Dear Colleagues,

As all of you know, this past year has created a set of extraordinary financial challenges for our university as it has for others. I am grateful for the continuing efforts made by people across Harvard to confront these new realities with thoughtfulness and care, and with an emphasis on sustaining the strength of our core academic programs.

With compensation accounting for so high a proportion of our budget, we will enter the 2009-10 academic year with salaries held flat for faculty and exempt staff; we have also offered a voluntary early retirement program in which more than 500 staff members across Harvard have chosen to participate.

While these actions have helped us reduce expenses, we nevertheless have more we must do. In the coming days, Harvard’s Schools and units, as well as its central administration, will be carrying out a reduction in the size of our workforce — modest in comparison to the overall size of our University-wide staff, but nonetheless painful for those people directly affected, as well as for our community as a whole. Most of the Schools will carry out the process this week; the Faculty of Arts and Sciences, the Medical School, the central administration, and several of the allied institutions will follow, beginning on June 29.

Such decisions, in their human dimensions, are among the hardest that an institution like ours can make. But difficult circumstances have called for difficult decisions across the University.

As we proceed through this complicated transition, I want again to express my appreciation to all of you for your dedicated efforts on Harvard's behalf. A letter from Marilyn Hausammann, our vice president for human resources, explaining more about the planned reductions, appears below.

Sincerely,

Drew Faust

Dear Colleagues,

I am writing to let you know that most of the Schools, allied institutions, and units in the central administration at Harvard will be carrying out a reduction in our workforce over the next seven business days.

The size and scope of the reductions will vary across the Schools and units, but when taken together these changes will result in the elimination of approximately 275 staff positions. About 40 more staff members will be offered positions with reduced work hours or an academic year schedule. Deans at the affected Schools and department leaders will be communicating directly with their staff members about the changes taking place in their local communities over the coming days.

We regret the impact this will have on the lives of our valued colleagues. This decision was driven by the financial challenges facing the University after a projected 30 percent drop in our endowment, as well as pressure on other revenue sources, and it should not be allowed to diminish the many contributions made by these staff members during their time with the University.

Over the past six months, managers across the University have scrubbed their budgets for non-personnel savings, canceled or curtailed travel, and limited other discretionary spending. We have slowed development in Allston, strictly limited hiring, and reduced our reliance on outside contractors. We have held salaries flat for the coming year for our faculty and exempt staff, a move affecting more than 9,000 individuals. And the Voluntary Early Retirement Program that was offered to about 1,600 employees attracted more than 500 participants.

These steps have helped to keep the number of involuntary reductions as small as possible. Unfortunately, further cuts are needed in order for Harvard to adjust to the institution’s new economic reality.

About half of the positions eliminated are administrative or professional positions, and almost all of the remaining ones are clerical or technical jobs. Service and trade workers will be largely unaffected.

The University is taking a number of steps to support staff members facing layoffs. These include:

• 60 days of pay from the time of notification,
• lump-sum severance of one to two weeks of pay for each year of service,
• enhanced severance benefits that include an additional four weeks of pay, and
• the opportunity to continue medical and dental benefits for 18 months, with a full year at subsidized rates.

Employees will have access to information about their benefits in individually prepared materials, on HARVie, and at a special walk-in Employee Support Center.

Administrative/professional and non-union employees wishing to begin a new job search are eligible for outplacement services and employment coaching. Harvard case management will be provided for HUCTW members. And, effective immediately, Harvard will institute a 30-day external hiring freeze for staff jobs to focus our efforts on matching qualified internal candidates with current job openings. I know that this is difficult news both for our colleagues whose positions are being eliminated and for those of you who will miss working alongside them. I think it is important to note that all of the steps that we have taken to reduce spending over the past six months have been taken with the aim of sustaining the academic and organizational capabilities Harvard will need for the future, while minimizing the impact on our workforce.

To those of you who are directly affected by this reduction in force, please know that we will do everything we can to make your transition as smooth as possible.

And to the entire University community, please know that we appreciate your dedication in this challenging time. With your help, Harvard will continue to be a vital and engaging place to work.

Sincerely,

Marilyn Hausammann
Vice President for Human Resources

Letter from Drew Faust

February 18, 2009

Dear Members of the Harvard Community,

More than halfway through the academic year, I write again with some thoughts on our work together in these unusually challenging times.

Every morning's headlines, every day's conversations remind us that we remain in the midst of an economic downturn unlike any in decades.  Uncertainty sometimes seems our only certainty. But what has become clear is that we are living through much more than a bump in the road.  Our economic landscape has fundamentally changed.

For Harvard, as for many other colleges and universities, our challenge is to confront the new economic realities and intelligently adapt ourselves to them, while at the same time affirming and strengthening the enterprise of learning and discovery that lies at the heart of what we do. 

Doing so will mean taking some difficult steps.  At a time of new constraint, it will involve discipline and sacrifice.  It will entail hard choices about what matters most -- not an easy exercise for a university like ours, where local autonomy is prized, where our many programs operate at a remarkable level of quality, and where we each have our own view of what is essential. 

This challenge can seem particularly daunting after a period of extended growth and expansive opportunities.  But we live in the moment that history has presented to us, and I am confident we will rise to this occasion as Harvard has so many times before.  It is our collective obligation to face the situation with the right balance of short-term focus and long-term ambition, for ourselves and for the generations whose opportunities will be shaped by our choices. 

Wherever we work or study within Harvard, whatever the demands of our present moment, we share enduring ideals.  We are committed to attracting the most able and creative community of scholars in the world, and pursuing new knowledge and ideas with all the imagination and rigor we can summon.  We are committed to opening our doors to students of the highest caliber, and offering them an education worthy of the talents they bring to us.  We are committed, as part of a nation and a world vexed with complex problems, to seeking new understandings and solutions informed by serious research.  And we are committed to upholding the values of free inquiry and expression, of excellence and innovation across the domains of knowledge that shape our university.

       *

We confront sobering financial conditions as we pursue these commitments.  As we reported in December, our planning for 2009-10 assumes that our endowment will have lost roughly 30% of its value in 2008-09 -- before subtracting the additional $1.4 billion that will go toward current operations.  Such a significant decrease presents us with difficult tradeoffs -- all the more so when our other major revenue sources are also under strain.  The endowment has come to support more than a third of our annual operating budget.  The current yearly endowment distribution -- the dollars we take out of the endowment to support activities across the University -- is approximately 50% higher than it was when the endowment was last at the value we expect as of next June 30.  Tinkering around the edges will not be enough.

I am grateful to faculty, staff, and students across Harvard who are working hard to consider how we can reduce budgets and how we can explore new ways of doing things that not only save costs but enhance our operations.  These efforts will likely become more difficult, not less, as things move from plan to reality.  What is more, our conscious avoidance of "one size fits all" solutions means that not everyone is going to be happy with every outcome. 

Mindful that compensation accounts for roughly half of our annual university-wide expenses, the deans, the provost, and I have agreed that salaries for faculty and exempt staff will be held flat in the next academic year.  In addition, we are this week launching a voluntary early retirement program for which some 1,600 of our staff members will be eligible.

Our planning includes an intensive, ongoing review of the University's portfolio of capital projects and a reconsideration of the pace and scale of our physical expansion in Allston.  Our task is to make sure that we avoid overextending the University's near-term financial commitments, while assuring the vitality of our academic programs and respecting the important interests of our neighboring communities. 

In a separate letter today (www.president.harvard.edu/r/r/allston.php), I have described our intention to slow the construction of the Allston science complex and to reassess our plans beyond the current phase of construction.  This is a difficult step, for both Harvard and our neighbors, but I am convinced it is a necessary one.  From now until the end of the calendar year, we will complete the science complex's foundation and bring the structure to ground level -- a requirement under any scenario.  Meanwhile, we will explore whether there are feasible ways to lessen the complex's cost, through design changes or other means. This approach will give us further time to consider, when the first phase of construction nears completion, whether reduced expense or improved economic conditions will enable us to proceed with above-ground construction on an adjusted pace, or whether we will pause construction after the foundation is complete.

As we recalibrate our near-range Allston plans, we will sustain our momentum in spurring cross-school and interdisciplinary science.  We have been able to identify excellent alternative space for programs that had planned to occupy the Allston science complex upon its completion in 2011.  Our new Department of Stem Cell and Regenerative Biology, and the associated Harvard Stem Cell Institute, will take up residence in renovated space in Cambridge -- indeed sooner than would have been possible in Allston.  This will allow our extraordinary group of stem-cell scientists from the FAS, the Medical School, and our affiliated hospitals to come together more rapidly; it will also help assure that our undergraduates have ready access to work at one of science's most promising frontiers.  A second major cross-school initiative, the Wyss Institute for Biologically Inspired Engineering -- launched with an extraordinary gift from Hansjoerg Wyss -- will make its initial home in Longwood, with additional space in Cambridge near SEAS and FAS science departments.  This new venture at the nexus of engineering and the life sciences has already begun its exciting work.

Planning for other Allston development will continue, but it will happen at a slower pace.  I have asked our planning team to develop options for interim improvements to Harvard's existing properties, and to continue to engage in community improvement efforts in Allston-Brighton.  As we gauge our capacity to mount new projects over time, we will also aim to think in more integrated ways about the University's space needs in Allston, Cambridge, and Longwood.  No less than before, what we do in Allston remains a vital part of Harvard's future.  While the economic downturn necessitates a change of pace, we remain committed to a long-term vision of Allston that will take full advantage of the historic opportunity it represents -- as a home for innovative education and research, and as a crossroads for programs that would benefit from closer interplay.

       *

The economic crisis, of course, has stressed the resources of many of our students and their families.  With that in mind, we are working to make sure we restrain growth in tuition and fees for next year, while affirming our robust commitment to financial aid. Our various graduate and professional schools plan to maintain their strong student aid and fellowship budgets for 2009-10.  For undergraduates in Harvard College, the package of tuition and fees will increase by 3.5% next year -- at the same time we carry forward in full the financial-aid initiatives we have introduced in recent years to ensure that a Harvard College education is affordable for families across the income spectrum.  Since 2004, we have doubled the amount we spend on undergraduate financial aid.  (See the related news release at www.news.harvard.edu/r/tuition.html.)

We have received a record-setting number of applications for the College class of 2013 -- more than 29,000 for a class that will number roughly 1,650 students.  Next fall's freshmen will arrive to a new General Education curriculum, replacing the Core, and I appreciate the efforts of the many faculty who are working to populate the revised curricular framework with a new generation of compelling courses. 

Following a number of years of significant increases in the number of faculty university-wide, growth has slowed, but searches remain in progress to fill more than fifty open faculty positions across Harvard.  They range from South Asia studies to human genetics, from urban planning to contemporary Islam, from fluid mechanics to law and public health.  We continue to plan for intensified efforts in select areas of academic priority, both within schools and for the University more broadly. As president, I will continue to devote special attention to those areas that enable Harvard to mobilize its extraordinary intellectual resources across fields and across schools -- areas like energy and the environment and global health, which involve students, faculty, and staff from every part of Harvard in activities ranging from courses for undergraduates to research activities in sites around the globe.

In December, the University's Task Force on the Arts issued a report that calls for Harvard to make arts practice and performance an "integral part of the cognitive life of the University."  I urge you to read the report, and especially the eloquent introductory statement about the place of the arts in a research university and in a liberal arts education (see www.harvard.edu/r/arts_report.pdf).  Many of the task force's recommendations depend less on enhanced resources than on a rethinking of the curricular role of the arts and a more positive embrace of the many types of arts practice and activity that already occur on our campus. Thus, we are working to bring a number of the recommendations to fruition soon, and others will unfold over time.  Yo-Yo Ma's remarks and performance on February 6 -- part of a two-day event highlighting opportunities and encouraging careers in the arts and the humanities -- remind us what a singular source of inspiration and insight the arts can be during uncertain times.

We are also considering how to make the most of a moment in which interest in public service is on the rise.  A remarkable number of Harvard faculty -- in law, economics, science, health policy, and other fields -- have been chosen to serve in the new administration.  Harvard alumni will hold an array of senior posts in the White House, the Cabinet, and beyond.  And it was striking to watch an inauguration in which three Harvard graduates -- the President, the First Lady, and the Chief Justice of the United States -- stood together to mark a historic transition in our nation's leadership.  The new administration has made clear that science and knowledge are central tools of government and public policy.  We at Harvard have critical contributions to make in such a time, to ensure, as our new dean of public health, Julio Frenk, recently put it, that the "power of ideas" has its fullest impact on "the ideas of power."  David Ellwood, dean of the Kennedy School, describes the present moment as an almost unprecedented opportunity for Harvard to contribute both to public service and to public solutions in a time of global crisis.  We must work to help our students pursue careers that aim to serve the common good, in government and other fields.  No less, as we face our own hard choices, we must keep in mind how our work here -- across many fields of knowledge -- can best contribute to informed debate on the hard choices facing the commonwealth, the nation, and the world. 

       *

In a time of dramatic and often disquieting change, it is important that all of us remember the enduring purposes of universities and the enduring legacy of this one in particular.  We are a community of distinguished scholars, talented students, and dedicated staff -- teachers and learners defined by our ideas and discoveries, not by our financial resources. Let us keep those purposes foremost in our minds as we pursue our work together in changing ways for changing times.

Sincerely,
Drew Faust

Letter from Harvard president Drew Faust

To Harvard Faculty, Students, and Staff:


I write today about the global economic crisis and its implications for us at Harvard.

We all know of the extraordinary turbulence still roiling the world's financial markets and the broader economy. The downturn is widely seen as the most serious in decades, and each day's headlines remind us that heightened volatility and persisting uncertainty have become our new economic reality.

For all the challenges such circumstances present, we are fortunate to be part of an institution remarkable for its resilience. Over centuries, Harvard has weathered many storms and sustained its strength through difficult times. We have done so by staying true to our academic values and our long-term ambitions, by carefully stewarding our resources and thoughtfully adapting to change. We will do so again.

But we must recognize that Harvard is not invulnerable to the seismic financial shocks in the larger world. Our own economic landscape has been significantly altered. We will need to plan and act in ways that reflect that reality, to assure that we continue to advance our priorities for teaching, research, and service.

Our principal sources of revenue are all likely to be affected by these new economic forces. Consider, first, the endowment. As a result of strong returns and the generosity of our alumni and friends, endowment income has come to fund more than a third of the University's annual operating budget. Our investments have often outperformed familiar market indexes, thanks to skillful management and broad diversification across asset classes. But given the breadth and the depth of the present downturn, even well-diversified portfolios are experiencing major losses. Moody's, a leading financial research and ratings service, recently projected a 30 percent decline in the value of college and university endowments in the current fiscal year. While we can hope that markets will improve, we need to be prepared to absorb unprecedented endowment losses and plan for a period of greater financial constraint.

The economic downturn also puts pressure on other revenues that fuel our annual budgets. Donors and foundations will be harder pressed to support our activities. Federal grants and contracts for sponsored research will be subject to the intensified stress on the federal budget. Tuition remains an important source of revenue, but in times like these we want to keep increases moderate, mindful that many students and families are facing economic strain.

Over the past several weeks I have been meeting individually and collectively with the deans of the faculties, as well as the Corporation, to share ideas on how we can best respond to this changed economic environment. We need to sustain our high academic ambitions at the same time that we bring greater financial discipline to all our activities. We have to think not just about what more we might wish to do, but what we might do at a different pace or do without. Tradeoffs and hard choices that can be avoided in times of plenty cannot be averted now. And, given the ongoing volatility and uncertainty, we need to plan and budget with a range of contingencies in view, including scenarios for reducing our spending both this year and next.

As we plan, we must also affirm our strong commitment to financial aid for our students. In Harvard College, that will mean carrying forward our recent years' initiatives to make a Harvard education affordable for outstanding students from low- and middle-income families. As before, families with incomes below $60,000 will pay nothing to send a child to Harvard College, and families with incomes up to $180,000 and typical assets can expect to pay no more than approximately 10 percent of income. Across our graduate and professional schools, we will maintain financial aid budgets at least at their current levels -- and ensure that our students still have access to needed loans, even though many banks are making them less readily available.

We have long been dedicated to research and the discovery of new knowledge across a wide range of fields of scientific and humanistic inquiry. In recent years we have made significant investments toward breaking down intellectual barriers across disciplines and across Schools to generate new knowledge and to develop new courses and educational opportunities for our students. These commitments must continue to guide us as we make decisions and choices in a significantly more constrained fiscal environment.

Harvard values its reputation as a stable and supportive employer, and we view our workforce as a critical part of all we do. We recognize as well the responsibility that comes with being one of the largest employers in the commonwealth of Massachusetts. At the same time, changing financial realities will require us to look carefully at compensation costs, which account for nearly half the University's budget.

We are assessing all aspects of our ambitious capital planning program, including the phasing and development of our campus in Allston.

We are working with administrative and financial deans from across the University to develop new approaches for generating both savings and new revenue sources, building on the ideas and best practices of each of the Schools.

Harvard is a famously decentralized place, and one size will not fit all. Each School will face its own particular challenges. But we must at the same time join together to address these new circumstances with creativity and a spirit of common enterprise.

Today, perhaps as never before, we need to work collectively to develop approaches and efficiencies that will allow every part of Harvard to thrive in the years to come. Together, we must continue to advance the priorities that define us.

For all that has changed in recent weeks, we remain devoted to attracting the very best students, faculty, and staff to Harvard. We will undertake the daily work of education and scholarship with the same intensity and imagination. We will set our academic sights just as high, and we will ensure that the ambitions and vibrancy of our community and the strength of its commitment to the pursuit of truth remain unsurpassed.


Drew Faust