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Yesterday Harvard reported that they are laying off 275 staff members both on the teaching side and the support and administrative side.  Surprisingly this caught many at the University by surprise.  I am including a video by NECN that goes into more of the detail but the facts are that the layoffs are due to the drop in their endowment which supports a significant amount of their year to year operating budget.

According to the NECN report the endowment that was valued at $36.9 Billion in June of 2008 is being estimated to drop 30%.  That would be an $11 Billion hit, an amount that is not only staggering but most would not have thought possible.  Harvard is also reporting that donations have been down.

According to the Harvard Crimson:

“The whole process has been handled so poorly. It’s been unforgivable, insufferable, and unconscionable,” said Richard E. Kaufman, a librarian in the psychology department. “It’s been painful to watch. The whole process has been incredibly stressful because nothing’s been explained, really, or mitigated up until now.”

Not everyone in the article agreed with the above statement because there are a variety of schools and departments involved.  Not everyone may have been communicated with the same way.

Though unfortunate Harvard is dealing with the economic challenges that have come about in the last year for all of us.  You might even say that private universities have a unique challenge because of their reliance on returns from their endowments.  Harvard employs around 16ooo in the state of Massachusetts so overall the layoff is quite small as a percentage.  The seriousness of the economic forecasts for the university can be seen not only in the layoffs but in the projects that have been put on hold.  The most visible of which is the Harvard Allston Science Complex that is planned to be built across the river in Allston.

Harvard is a major cornerstone of the Cambridge economy and will continue to be so.  Hopefully these layoffs are more short term than permanent.

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