As you know, we are addressing the university’s $10 million structural deficit through a combination of university and division-level cost savings. After much discussion with the campus, I decided last month to implement three university-level options: increasing the faculty and exempt staff contribution to health insurance, modifying our employee/dependent tuition waiver benefit and offering a faculty retirement incentive. We are also identifying $8.5M in savings at the division level.
Over the past few weeks, the vice presidents and deans have been working with their units to identify division-level savings. Empowering them to manage resources and make the decisions that directly affect their units is critical as we shift to less centralized budgeting. Our work has been guided by a series of questions that emphasize the value we place on making students and their success a priority, limiting the impact on employees, and thinking broadly about how decisions affect the university.
I met with each VP to review their proposed reductions, and we talked about their efforts to limit the human impact of these difficult decisions. To reduce personnel costs, which account for 70 percent of the university’s expenditures, they first looked at eliminating vacant positions. This was possible because of the 60-day hold on staff vacancies that we instituted in the spring of 2018, and the fact that we deliberately held many positions open past 60 days. The VPs also considered proposals for voluntary reductions in FTE, potential savings from the faculty retirement incentive (which has been expanded), and operational costs such as purchased services and supplies. Only after exploring all other options did we consider layoffs.
As a result of this process, we will eliminate approximately 80 vacant exempt, classified and faculty positions. After much deliberation, we also decided to eliminate 11 positions through layoffs of exempt and classified employees. We are now having individual conversations with these employees, and my heart goes out to them. They are loyal, hard-working members of our UNC community who deserve our thanks. We will support them through this transition by providing severance pay and benefits through May, job placement assistance, and continued tuition waiver benefits for any dependents enrolled at UNC.
We are moving as quickly as possible to minimize uncertainty and the inevitable anxiety of a process like this. We expect to have conversations with all of the employees whose positions are being eliminated by Thursday, and I will follow up with another campus email when this is done.
Thank you to the many people across our campus who have worked diligently to identify savings. I recognize that this is unpleasant work, sometimes even painful. Your efforts will provide a critical foundation for us to build on next fall when we come together as a campus to affirm our values and articulate a vision for the future of UNC. We are still loading detailed budget information into our financial system, but every division appears to be on track to meet its cost-saving goal. When this is confirmed, we will develop a summary report to share with campus and discuss at a town hall meeting in April.
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