All Posts Tagged With: "recession"
Harvard to lay off 275 employees
Despite attempts to save money, university cites “extraordinary financial challenges”
The Boston Herald is reporting that, in the wake of a 30 per cent drop in its endowment, Harvard University will be laying off 275 employees over the next week.
“Difficult circumstances have called for difficult decisions,” wrote Harvard president Drew Faust in an e-mail, citing the school’s “extraordinary financial challenges.”
Since January, the school’s administration has tried to save money by cancelling travel spending, reducing discretionary spending, and freezing the salaries of 9,000 employees. Buyouts were offered to 1,600 workers; 500 accepted the offer.
According to an e-mail from the school’s vice president for human resources, the layoffs will be split between administrative and professional positions as well as clerical and technical workers. Forty other employees will see their hours cut.
“These steps have helped to keep the number of involuntary reductions as small as possible,” reads the HR e-mail. “Unfortunately, further cuts are needed in order for Harvard to adjust to the institution’s new economic reality.”
Tuition at USaskatchewan to increase
Fees will go up by 3 per cent, all departments will suffer budget cuts
Tuition at the University of Saskatchewan is going up by an average of three per cent.
The Saskatoon-based university also says it’s cutting costs to help slash an estimated operating budget shortfall of $10 million. The reduction means almost all academic and administrative departments will see cuts in their budgets.
Brett Fairbairn, a university spokesman, says the reduction is necessary because of the global economic downturn which has led to income shortfalls.
The university says tuition fees would have increased regardless of its financial situation.
Between 15,000 and 20,000 full and part-time students attend the university.
- The Canadian Press
Bursary and scholarship payments cancelled at UVic
Decision was made to protect what’s left in the school’s endowments
The Victoria Times-Colonist is reporting that investment losses at the University of Victoria have prompted the cancellation of bursary and scholarship payments for 40 per cent of the school’s endowment funds.
The decision was made to protect what’s left of the endowment funds’ principal, in order to ensure that UVic students will be supported over the years to come, says Shannon von Kaldenberg, associate vice-president of alumni and development.
This means that 60 per cent of the nearly 1,000 funds will continue to pay out in the next calendar year, until 2010. The remainder will be reassessed that spring.
The Times-Colonist estimates that hundreds of students will be affected. Last year, the university’s foundation paid out $5.4 million, but the annual return on investments used to pay for those awards have dropped about 18 per cent.
One donor, David Pollock, says he is “shocked and upset” to learn of the cancelled payouts. His bursary, set up in honour of his grandmother, has dropped from $64,000 to $55,000. If the university wanted to save capital funds, says Pollock, it shouldn’t have put the money in risky investments.
It isn’t all all bad news for job-hunting students
Younger, flexible employees are in the best position to survive this recession
Despite standing in a line of hundreds of students desperately searching for summer employment at a job fair, 18-year-old Julia Poissant isn’t fazed.
She’s well aware that the job market is shrinking around the world, but she isn’t willing to worry.
“I know there’s problems, but I’m feeling fairly confident,” she said. “You just have to look for opportunities and be proactive, I guess.”
Amid the global economic downturn, it’s hard for even seasoned workers not to feel like the sky is falling.
The picture can seem bleaker still for people who are just starting out in the job market, or hoping to score a part-time or summer job.
These fears are partly backed up by the most recent unemployment figures, which showed an almost 15 per cent unemployment rate for those aged 15-24, the highest in 11 years.
But experts say Poissant might have the right idea – there’s hope for younger people, who come more cheaply and with more flexibility than older workers and who have the potential to stay with a company for years after the economy recovers.
“I think there’s a lot more doom and gloom than the reality,” said Kirk Hill, the executive director of the Career Management Centre at Simon Fraser University’s business school.
“Yes, the job market is probably about the toughest in a few years, but there’s a few things to your benefit, being younger.”
Those newly graduating may be able to get positions at companies that otherwise aren’t able to hire permanent workers, said Hill.
“They may be able to do a co-op or they may be able to do an internship or a short-term contract because their hiring freezes don’t affect that,” he said.
Plenty of employers signed up for the city of Calgary’s youth employment centre job fair, said Lisa Wieser, community relations liaison at the centre.
“They are still kind of looking at that generation’s perspective and the energy they bring to the workplace and that and they really see a benefit in that.”
Interested employers come from a wide variety of sectors, including health care, recreation and child care, she said. A variety of retail positions are also open.
When Harvard grads go to Wall Street, get out
A simple way to time the market: follow the money — and do the opposite
If you’d been listening to Ray Soifer for the past several years, your investment portfolio would probably make you the envy of most so-called market experts. Since the early ’80s, Soifer has been using a system for timing long-term stock markets that’s rarely wrong. For several years now, his system has been suggesting to take your money out of the market. Last year it was screaming that a bust was coming.
Soifer’s method is simple, and more than a bit curious: he tracks the number of Harvard MBA graduates who take jobs on Wall Street or with investment banks, hedge funds and venture capital firms. If more than 30 per cent of Harvard’s graduating class takes one of those jobs, it’s a long-term ’sell’ signal (40 per cent of the class of 2007 went to Wall Street). If less than 10 per cent take the plunge into finance, it’s a ‘buy.’ In other words, the more Harvard alums on Wall Street, the worse things are likely to get.
The indicator isn’t really a knock on the quality or character of the Harvard biz school grad. Soifer is one of them (he graduated in the class of ‘65). “It’s not so much that the Harvard MBAs are any greedier than anybody else—certainly no greedier than law school or medical school graduates,” he says. “But it’s really more the behaviour of the Wall Street firms themselves.” When things are good on Wall Street, money starts flowing and competition and recruitment heats up, luring graduates from the prestigious school. Those hiring sprees are a pretty good sign that a boom is peaking and a bust is coming.
Next year’s number should be interesting, notes Soifer. Almost certainly, they will be down. Although, there is a lag between the hiring decisions and the state of the things on Wall Street. Next year’s numbers will include many who made career decisions in the fall of 2008, when the market was declining, but still before the meltdown. The indicator may not be in ‘buy’ territory just yet. “It takes two to three years for a market move to fully reflect itself,” he says.
Soifer acknowledges that while fairly accurate over the long term, his system is a better ‘sell’ warning than a ‘buy’ one. The last time his indicator hit the ‘buy’ level was in the early ’80s (the all-time low was in 1937).
And what does Harvard make of his indicator? “They’ve gotten used to it,” he says. But there was a period when they were not entirely pleased, he adds. “What miffed them was not that I was doing it. What miffed them was the idea that, ‘our graduates are going to that den of iniquity called Wall Street? We think better of them.’ ”
Generation Y me?
Young adults are staying in school longer, and accepting impermanent, no-benefits jobs
From The Toronto Star:
Generation Y grew up being told that if they were willing to work and study hard they could have it all: well-paying, fulfilling jobs that provided all the comforts.
But as they reached adulthood, secure jobs began vanishing, replaced by part-time, non-union work with little security, no benefits and odd hours. Then the financial crisis hit. Now, young adults are being forced to radically remake their life plans. They are staying in school longer to keep up with an “educational arms race” and accepting that life will be contract-to-contract, perhaps in different cities, and almost assuredly without benefits.
They are living in a purgatory of arrested adolescence, of delayed adulthood. They are unable to do what twenty-somethings have done for generations: settle into careers and start families.
Business grads: We’ll pay you to not come to work… yet
A twist on downsizing in investment banking
Recent university grad looking to get into investment banking? One I-bank will pay you to go and take a sabbatical year — before you even start work.
That’s the word from Credit Suisse, a Swiss bank that, like every other player on Wall Street, is feeling the pain of the recession. So it’s temporarily laying off employees who haven’t even done their first day of work yet. According to an article from Bloomberg yesterday (the best link I could find was here; click and scroll down a bit), 20 per cent of CS’s next class of investment bank analysts have accepted a US$40,000 offer to defer their employment start date until July, 2010. The offer was made to U.S. college graduates recruited to the bank, who would have started this summer.
The news is one more example of the poor job environment facing aspiring bankers. But CS’s long term view is surprisingly confident. After all, CS isn’t eliminating these not-yet-employees. It’s asking them to wait a year — by which time it presumably expects that its services and their skills will be more in demand. Instead of burning the proverbial furniture to heat the building, it’s trying to hang on to the most talented young recruits, assuming that it will soon need them. As the cliche goes, only time will tell.
University unions cry blackmail amidst economic downturn
UGuelph denies it threatened closure, says all universities are being hit hard
Unionized university staff say they are being pressured to accept pay and benefit rollbacks as their institutions cope with pension and operating shortfalls, according to this story in the Toronto Sun.
CUPE Ontario president Sid Ryan says unionized workers are increasingly becoming the scapegoats for the economic downturn. In a press release issued Monday, he said the University of Guelph, whose pension fund has a shortfall of $260 million, recently told its workers to open up their collective agreements or face the closure of their university.
“The University of Guelph is…blackmailing employees and threatening closure if they don’t open up collective agreements and give concessions,” said Ryan. “Universities can’t just threaten to close if workers don’t bow down to their demands.”
Alastair Summerlee, president of the University of Guelph, says there are absolutely no plans to shut down the university and no request has been made to re-open staff collective agreements. However, he did concede that union representatives have been asked to meet with human resources to discuss ways to address the university’s $16 million operating deficit with as little impact on jobs as possible.
“Everybody is in this kind of financial challenge — not just the higher education sector,” he says. “We’ve been working to try to do this without involuntary layoffs, so we’ve had an early resignation and retirement package, and so far we have been successful.”
According to Summerlee, all universities are currently struggling with the effects of the economic downturn on endowment funds and pension plans, which has been combined with the strains of increasing enrolment on operational budgets.
Despite facing a similarly large shortfall in its pension fund, Duncan Watt, Carleton University’s vice-president of finance and administration, told the Ottawa Citizen the school has no plans to ask unions to re-open contracts.
Gumdrops: Economic downturn U
A miscellany of post-secondary news from across the web
 Student financial aid at risk. University endowment fund losses are putting the squeeze on student financial aid budgets at institutions across the country.Perilous academic job market. Just a few months ago, Canadian universities were predicting a hot job market for professors in Canada. It now looks like the projected robust academic job market will be largely forestalled by university budget cuts and hiring freezes. U.S. sees nationwide growth in R.A. applications. With the promise of free room and board, resident assistant/adviser jobs have become much sought after positions for students at many U.S. universities. Wales drops universal student grant. The Welsh government has announced that it is phasing out a £1,940 universal student grant in favour of means-tested financial assistance that targets students from lower income backgrounds. |
Business programs culpable for financial crisis?
Fingers are pointed at young, greedy MBA grads with “half-baked” finance and management education
The Guardian’s Peter Walker examines the extent to which business schools are responsible for the ongoing financial crisis:
As the debris settles from the worldwide collapse in credit and banking confidence and the reckoning begins on who exactly led the financial system into chaos, an increasing number of fingers are being pointed at leading business schools.
Similar arguments have been made before, most recently when US energy giant Enron imploded amid a mountain of concealed debt, a scandal stewarded by another Harvard alumnus, Jeffrey Skilling. Too many MBA programmes, the simplified version goes, draw in young, greedy types with little business experience and indoctrinate them with half-baked management and finance theories, along with an unshakeable belief in their own talents, before sending them out to earn ill-deserved fortunes in investment banking and consulting.
This is, of course, a gross caricature. But the turmoil has shaken business schools, many of which are devising courses to examine what went wrong. Professors are pondering whether the theories they taught played a role.
Stanford set to cut athletic department amid downturn
With endowments suffering, 13 percent of admin and service staff will be cut
Stanford University has announced it will cut 21 positions in its athletic department because of the economic downturn, while keeping all 35 of its varsity teams and its coaches.
Stanford has one of the biggest athletic departments in the nation, but said the 13 per cent staff reduction from administrative and service areas was necessary because of decline in endowment value and fewer contributions during the recession.
The cuts will take effect this week.
Last month, Stanford athletic director Bob Bowlsby said he expected layoffs to deal with a projected $5 million in lost revenue over the next three years.
Bowlsby said Wednesday that $1.5 million has already been eliminated from the current budget, primarily in administrative areas.
The school has also identified $2.5 million in potential savings from reduced maintenance and travel and by freezing open positions.
In total, the department is cutting $5.4 million, about nine per cent of its operating budget excluding scholarship costs. Bowlsby didn’t rule out future cuts that include eliminating teams or coaches if necessary.
“We are making every effort possible to preserve opportunity for our student-athletes and to protect the quality of our programs,” Bowlsby said in a statement.
“As is the circumstance throughout the Stanford campus, we will continue to assess our budget projections and will make further adjustments as needed which may include programmatic, staff and sports reductions.”
Last year, Stanford captured its 14th consecutive Division I U.S. Sports Academy Directors’ Cup. The recognition is presented annually to the best overall program in each athletic division in the country.
In December, Stanford announced senior administrators would take salary cuts because of the U.S. financial crisis. The university is anticipating a 20 per cent to 30 per cent decline in endowment value this year.
- The Canadian Press
Education think tank calls for tuition hike
Despite middle-class backlash, group says move is necessary to preserve quality of education
On the heels of the release of the 2008 Survey on Canadian Attitudes toward Learning, which suggests that Canadians are concerned about the existing costs of post-secondary education, the Educational Policy Institute has released a report advocating that provincial governments allow post-secondary institutions to increase tuition further in order to offset declining revenues. From The Toronto Star:
Dramatic tuition hikes must be part of a recession survival plan for Canada’s ivory tower, warns an education think tank.
Colleges and universities must consider charging more, despite a middle-class backlash, if they hope to avoid diluting the quality of education during the economic crisis, says the report by the non-profit Educational Policy Institute.
The report predicts fee hikes of up to 25 per cent in the next couple of years – in line with increases during the last recession – which would generate $1 billion to $2 billion for recession-hit campuses.
The full text of the EPI report can be downloaded here in .pdf format.
Tough economy sees record number of university applicants in Ont.
More students means a higher cut-off average for many exclusive programs
A tough economy is being cited as the reason behind record-level university application numbers in Ontario.
The Council of Ontario Universities says 84,300 applications have been submitted this year – a 1.1 per cent increase over a record set in 2008. The council says the figure is 42 per cent higher than the 59,197 applications made in 2000.
Peter George, chairman of the Council of Ontario Universities, says more people see a university degree as key to a successful career, “particularly when economic conditions are challenging.”
The only year with a higher total was the “double cohort” year of 2003.
That’s when 102,618 students applied to universities after the cancellation of Grade 13, causing two classes to graduate in the same year.
The council said the number of people applying for university typically increases during economic downturns.
“Applicants know that this is a good time to attend university and get that degree or to upgrade their skills, Paul C. Genest, council president, said in a release.
Last year, some 84,000 high school students applied for 64,000 spots at Ontario’s 20 universities.
Grade cut-offs change every year, and vary for each program in each institution. Last year, most schools made offers to students with minimum grades averaging in the mid-70s or 80s.
Several stringent programs made offers only to students whose average grade was in the low to mid-90 range. Those programs included McMaster University’s health sciences, York University’s Schulich School of Business and biotechnology at the University of Waterloo.
Some universities begin making offers of admission as early as February, but most institutions send out rolling offers until late May.
- The Canadian Press
Economic crisis threatens staffing, student aid
Salaried positions might be cut, along with scholarships and bursaries
Post-secondary administrators across the country say the global economic crisis is threatening everything from staffing levels to scholarships, and one Ontario school announced Thursday it plans to cut tens of millions of dollars from its budget.
Wilfrid Laurier University needs to cut its operating budget by nearly 16 per cent over three years – about $31 million – to address “unprecedented financial challenges” that are affecting the university sector, said president Max Blouw.
“I think it’s a bit premature to judge at this time what will be the targets of scaled-back expenditures … but it’s almost certain that some salaried positions will in fact be impacted, and I don’t think I can reasonably say that won’t be the case,” he said.
“And scholarships and bursaries, the way in which we attract the most qualified, talented students, might be impacted.”
A precipitous drop in the value of pension and endowment funds and insufficient funding from the provincial government made the upcoming cuts a necessity, Blouw said.
The University of Toronto made a similar announcement a few weeks ago in disclosing plans to hold off on planned wage increases for its president, vice-presidents and vice-provosts, principals and deans, and some senior administrative staff.
“We are already feeling these financial pressures, and it appears that the situation will be materially more difficult in 2009-2010 and perhaps again in 2010-2011,” president David Naylor said in a message on the school’s website.
“I ask that all faculty and staff work collaboratively to contain expenditures with an eye not only to immediate challenges but especially to 2009-2010.”
The Association of Universities and Colleges of Canada says schools across the country are facing similar struggles and is calling on the federal government to provide $2.4 billion in infrastructure funding in its upcoming budget to avert any further cuts.
