Harvard nixes staff cuts to address expected shortfall

Harvard University has announced that it will not pursue layoffs or furloughs to manage its forecasted revenue shortfall.

After previously announcing that schools and units within may have to consider furloughing or laying off staff to mitigate a revenue shortfall of $415 million for the current fiscal year and a revenue shortfall of $750 million for its following fiscal year beginning July 1 due to the COVID-19 crisis, Katie Lapp, executive vice president of Harvard announced that the school was no longer considering staff cuts as an option.

"Given the uncertainty around the University's plans for the fall semester, the need to assess the impact of those plans on our staffing needs, and our commitment to minimize negative economic impacts on employees, we will not be pursuing any furloughs or layoffs of our employees at this time," wrote Ms. Lapp in an open letter addressed to staff, students and alumni.

Harvard is also extending the guarantee of pay and benefits continuation beyond June 28 for its directly employed staff and contract workers whose work has been idled due to the pandemic.

In addition, Harvard has established three new voluntary workforce programs for university employees: the 2020 Voluntary Early Retirement Incentive Program, which enables eligible staff to retire sooner than planned by providing an additional benefit equal to one year of pay; a voluntary reduction in accrued vacation balances during summer and fall 2020; and a voluntary time reduction program, where interested staff may submit proposals to reduce their work hours and pay by 10% to 50% for a minimum of two months.

Ms. Lapp said in May that Harvard would be implementing such cost-saving measures as "salary freezes for all faculty and exempt staff, a university-wide hiring freeze, deferring or canceling all discretionary spending, a review of all capital projects to determine which ones can be deferred, and voluntary salary reductions for senior leadership."

At the time, she had also announced that the school had not ruled out implementing furloughs and layoffs in the future.

Harvard's $40.9 billion endowment is the largest of its kind in the U.S.