DU Chancellor Jeremy Haefner announced in a Community Meeting today that DU has a current budget shortfall of at least $45 million, as a consequence of the COVID-19 pandemic. Accordingly, DU will be making some large budget cuts to mitigate the losses, including at least 38 full layoffs announced today, along with 37 more employees who were given extended administrative leave with benefits, along with other across-the-board salary reductions of up to 10% for those earning more than $90,000 annually and other projected administrative savings.

Obviously, these announced layoffs are simply a starting point as the university grapples with this massive budget shortfall, as part of a much larger national reality hitting most of American higher education in the wake of the devastating virus.

Here at LetsGoDU, we believe this DU budget shortfall is the largest budget issue DU has faced since the grim days of the late 1980s when DU had a $12 million deficit and $45 million in deferred maintenance (in 1989 dollars) and had to borrow money to make payroll.  DU is still in much better overall financial shape now than then, but the current cuts (and perhaps future) are expected to be painful.

“There are moments in an organization’s trajectory when you understand the gravity of the situation and you know you are at a critical moment,” Chancellor Haefner wrote today.  “This is one of those moments and this is a message that is so difficult to write and even harder to share.”

DU Athletics and Recreation, with a recent headcount of about 175 employees, has likely been deeply affected by the cuts, with our sources telling tell us up to 30 athletics employees may be laid off either permanently or temporarily (which would be somewhere between 15-20% of the Divisional headcount). We don’t yet know if any coaches or other higher-profile athletics employees have been deeply affected by the bloodletting. We also don’t yet know if there are operational cuts planned to varsity athletics such as game, staff or travel reductions, but don’t be surprised if there are some of those in DU’s future.

Other as yet unannounced cuts we’re hearing about include 10 full-time employees in University communications as well as two communications contractors with activities to be outsourced to an agency. We also expect deep cuts to University Advancement (with about 150 employees) and ancillary support departments like Special Events and Conferences and the Newman Center for Performing Arts, two areas that have had their calendars wiped clean of future on-campus events, and no longer require as many people to operate.

While we are not yet clear about cuts to the academic side of the house, we should expect a number of adjunct professors to be cut during the house cleaning. Surprisingly, DU is still reported to be spending money on a brand refresh, despite the fact that prior Chancellor Rebecca Chopp launched DU IMPACT 2025 several years ago and DU recently rebranded in 2014 for the Sesquicentennial.

At this point to our knowledge, it appears that large administrative departments such as Campus Life and Inclusive Excellence have yet to suffer any cuts. Nor do we have information on any changes to the current organizational structure or layoffs of senior officials. One might hope the university is considering some high-level cuts given the university’s current administrative bloat, including vast numbers of highly paid assistant vice-chancellors, associate vice-chancellors, and the like.

According to the financial report issued today by the Chancellor’s office, the damage from COVID-19 now and in the future, look to cost DU at least $45 million dollars – not the $21 million originally indicated by Haefner some weeks ago.  And Haefner today called the $45 million in losses a “best-case scenario”.  According to DU, the biggest losses are from “room and board revenue due to required de-densification efforts, cancellation of ticketed events and youth programs in athletics, loss of parking revenue, cancellation of summer conferences and events, temporary closure of the Newman Center for the Performing Arts, the loss of interest income that ordinarily supports our working-capital budget, and reductions to the value of our endowment.”

At the same time, the University is also hit by new expenses related to COVID-19, which include “those related to testing and contact tracing; increased cleaning and disinfection of our residences, classrooms and workspaces; new technology costs related to online instruction and course supports; and of course, emergency financial aid for many of our families experiencing significant financial loss.”

Other actions cited in the DU loss mitigation plan include:

• Continue to freeze all non-essential spending
• Continue to freeze non-essential capital projects
• Continue to freeze non-essential hiring
• Temporarily reduce staff in those areas unable to work due to COVID restrictions
• Enact a partial, temporary reduction of the retirement match
• Enact temporary salary reductions
• Enact targeted reductions in auxiliary or non-mission critical units, including, in some cases, position eliminations

Obviously, this is a developing story, and we’ll keep you posted here as we learn more.

Photo: Courtesy University of Denver