Pandemic pain

UT Austin braces for layoffs after COVID-19 triggers financial woes

UT Austin braces for layoffs after COVID-19 triggers financial woes

University of Texas at Austin tower aerial
UT Austin is currently creating a cost-cutting plan due to the current pandemic. University of Texas at Austin/Facebook

Due to an anticipated drop in revenue caused by the coronavirus pandemic, job cuts might be on the horizon for the University of Texas at Austin.

In a May 19 letter to UT faculty and staff, university President Greg Fenves and his soon-to-be interim successor, Jay Hartzell, wrote that cost-cutting plans being crafted by university units that generate revenue might include temporary furloughs or permanent layoffs. These potential cutbacks would affect staff in “specific revenue-generating units where revenues have declined,” they wrote.

Fenves and Hartzell explain that revenue-generating units at UT finance their operations through means such as fees and memberships. The units’ budgets rely primarily on services provided to internal and external customers.

The letter doesn’t mention which units might be hit by furloughs or layoffs. The university’s revenue-generating units include the AT&T Conference Center, Bass Concert Hall, and UT Athletics.

“These are very difficult steps for everyone affected,” the May 19 letter says, “and we understand your concern as you wait for specific information about decisions in your units, but they are necessary given the impact of COVID-19 on the university’s financial situation.”

UT’s flagship campus employs about 24,000 staff members and 3,000 faculty members, making it Austin’s largest single employer. The university’s annual budget is roughly $3 billion.

The possibility of furloughs and layoffs comes in response to a financial shakeup triggered by the pandemic. In March, UT moved all classes online to curb the spread of COVID-19. A decision hasn’t been made yet on whether UT’s fall classes will be online, on campus, or a combination of the two.

“The shifts we’ve been forced to make in the ways we teach and work have come with increased costs,” Fenves and Hartzell wrote. “We are also facing declines in our expected future revenues and continued uncertainty about the coming academic year. Taken together, these forces have significantly altered UT’s immediate financial outlook.”

In April, UT canceled merit raises for 2020-21, and limited new hires and major expenditures.

“The University of Texas has been through hard times before, and we’ve always come through them with a strengthened sense of purpose and a dedication to our world-changing mission,” Fenves and Hartzell added. “We have no doubt that this will be the case with COVID-19, and we thank you for your understanding and commitment.”