There are fast developments this morning....
Executive Vice President Trask has revealed the endowment -- once $6.1 billion -- has shrunk to "just north" of $4 billion, an astonishing 33 percent loss. In mid-February, Trask put the loss "in the mid 20's" percent.
For the first time, the Provost has stated faculty hires will be substantially reduced. Just weeks ago there was unofficial talk of hiring more than usual -- to exploit the availability of many scholars.
University wide, salaries are now frozen.
President Brodhead has written two emails -- one to the university as a whole that has been released, one to its medical component that will be available in the hours ahead -- dealing with the financial crisis and the future of Duke.
Brodhead says Duke will trim its budget gradually, with the Trustees authorizing dipping into reserves so there are no jolts. But he talked of inducing employees into early retirement and hinted at layoffs.
Brodhead said in a few years, Duke would be smaller, its education budget in the range of $1.75 billion. This is a step down from the current budget which is nearly $2 billion, and far far less than would have been spent if the fiscal melt-down not occurred.
Brodhead says Duke will only construct buildings like the new cancer center which has dedicated funding. New/Central Campus -- the vast expansion project -- is on indefinite hold. A month ago Trask talked about borrowing to finance this; that idea is dead.
This morning's rapid announcements establish the crisis at Duke is far far far deeper than officials had previously acknowledged.
More later.
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While the crisis is deep, at the very least - at present - we are not in the situation some of our peers are in. Yale will likely be laying off 300 or more workers; Harvard is apparently offering buyouts to 1600.
ReplyDeleteI did not see in the letter regarding the education budget. I saw that the operating budget must be reduced by $125M off a ~$2B base - I wouldn't call that the "education budget," though.
It is, indeed, going to be an interesting ride; after years of 20%+ returns, looks like we will go through a few years, at least, of -20%. Painful to see, but I am not so sure that the crisis here is more dire than elsewhere and may, in fact, be less so because of Duke's current accounting model.
I do wish communications from central were more forthcoming - saying things like "down 20% since the end of 2008" really should be updated to "end of February" for the true picture to be seen. I know my retirement account has lost another 16% since January 1, though I've never picked quite so well as DUMAC :-D
Would laying odd 88 professors help?
ReplyDelete"Would laying odd 88 professors help?"
ReplyDeleteI guess you meant laying off.... but maybe not.... they are kind of odd, and your suggestion might actually help...
To 6:06.
ReplyDeleteYes, I was off by a key on the key board.
I like the fact that Kristin apparently makes no attempt to cull out any comments as my blunder appeared immediately.
You go Girl!(Kristin)
The 11:23 (North of 8 mile)
Lay off the professors?
ReplyDeleteNah, let's axe a few sports teams.
Lacrosse anyone?