The University of Sydney has announced the “difficult news” that it will cut hundreds of academic and general staff to compensate for lower than expected student enrolments, and in order to free up money for IT and maintenance.

Vice-Chancellor Michael Spence, a graduate in English, Italian, law, and theology, told staff via an emailed video briefing that “we need to consider the position of that small minority of academics who do not contribute significantly either to our research or teaching.”

Staff costs are to be cut by 7.5 per cent ($25 million saved from the loss of about 150 academic staff, and $28 million from cutting about 190 general staff).

The president of the University of Sydney branch of the National Tertiary Education Union, Michael Thomson, said that the cuts were unnecessary, would erode the university’s quality, increase the “cheap option” of increasing reliance on casuals, and cause a further deterioration in already overloaded teaching and student services.

“This university has loads of money, it’s got lots of students and it’s going to increase those student numbers next year – slightly not massively – but at the moment the university is busting at the seams; lecture halls are overfull, and staff are overworked and under-resourced,” Mr Thomson said.

“We’re not going to be able to provide the service and support for students that we would like to,” Mr Thompson said. “I’m a general staff; we’re the people who do the enrolment and admissions and back-up.”

If the university leadership overestimated the growth in student numbers, it should not now be up to staff to be shown the door, Mr Thomson said.

The announcement comes less than a fortnight after the University of Sydney recorded 2010’s third highest operating surplus of any university in the country. Third only to the University of NSW and the Australian National University, the University of Sydney last year notched up an operating surplus of $113.7 million, with over half a billion dollars in revenue coming from student fees and charges, student contributions, and Commonwealth contributions in lieu of students paying upfront fees.

The University issued a statement addressing the question of the surplus as follows:

The operating surplus is not profit that can be used at the University’s discretion. Most of the surplus consists of grants from the federal government that must be spent on particular infrastructure projects; income from donations and bequests that the University is legally required to invest in perpetuity, using only the income for particular purposes; and research grants and other government funding for special purposes that cannot be used to support staff salary costs. Our surplus includes Capital Grants of $24m, donation and bequest income of $44m and unspent research and other government grants of $18m which we are required to keep set aside.

Below is what Dr Spence told the staff, and below that is a recent graduate’s open letter to Dr Spence, who also sent an email to alumni explaining his decision.

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Transcript of Dr Spence’s video to staff

Monday 21 November 2011

To all staff

A couple of weeks ago, a journalist commented on the extraordinary success that the University has been having. He rattled off a list of achievements: the establishment of the CODCD and the China Studies Centre; our record levels of philanthropy, including the Picasso gift; our success in this year’s research grant rounds; and our improvement in the Times Higher rankings. “You should be really pleased!” he told me. And he’s right: we have had a good year on many fronts. We have done all of this, and much more. The ongoing excellence of our teaching and research has been recognized again in major national awards, and we have made significant progress in the implementation of our Strategic Plan. We are in a position of strength.

But to progress further, we must, amongst other things, invest in our buildings and ICT systems: their current state is of real concern to everyone. We have a backlog of repairs and maintenance that will cost hundreds of millions to put right, and there is an urgent need for new facilities to better support you and your work. All of this will come as no surprise. You raised these issues in our Green Paper consultations and you continue to do so. You deserve better.
As I explained at a recent all-staff forum, we intend to fund this much-needed investment in two ways. First, we need to release resources that we currently spend on administration. Second, we can no longer carry members of the University who are not pulling their weight: it is simply too expensive to do so. These are again both issues identified in our strategic planning process and work is progressing on changes that will yield results in the medium term.

But our current financial position means that we need to act now as well. This year has presented us with a pressing financial challenge. When we formulated our 2011 budget, we planned for a modest growth in fee income of 7 percent, based on 9.6 percent average growth in the previous five years. However, fee income did not rise at this rate. While demand for entry is still as high as ever, more domestic students than usual deferred or lightened their load as our economy proved to be more robust than expected; and of course the international student market has been affected by a strong Australian dollar and uncertainty about government policy changes.

This all means that if we are to meet our financial targets in 2012, we need to take some stringent measures. We will have to reduce our expenditure: we will have to accelerate the implementation of our plans for reform. Senate and SEG have agreed on the following strategy:

First, we will reduce our non-salary expenditure next year by $28 million. This means that every area will need to examine all their activities and find savings. There will have to be some serious belt tightening.

Second, we must reduce the cost of our administration more quickly. Each area of the University, including my own, will be given an expenditure cap, restricting the total amount we can spend on professional staff salaries, casual salaries and contractors. Each faculty, portfolio and professional service unit will be able to decide how this will be managed, but the cap must be met.

Third, we need to consider the position of that small minority of academics who do not contribute significantly either to our research or teaching. We will immediately put in place a plan to manage this process and we are expecting that a number of academic staff will be offered redundancies, pre-retirement contracts, a rebalancing of their duties and the like.

This will be a University-wide open and transparent process, based on a set of rigorous but very clear criteria and we will be consulting with you about that process.

This is difficult news, and I can’t pretend that it will be an easy 12 months. But it is essential. The University is at an important crossroads: if we don’t invest in infrastructure now, we will not be able to meet the goals we agreed together. It’s as simple as that. We cannot apply another band-aid measure for the short term. Our responsibility is to secure the University’s future and to be true to our tradition of excellence.

There is a link on the Staff Page of the University website to further details about these initiatives. Please read the information you will find there, and if you have any questions, please contact your local Human Resources Relationship manager.

Thank you.

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A letter from University of Sydney alumni Lauren Quinn:

Dear Mr Spence,

I have just received your ‘open letter to alumni’, and I wish to register my disgust.

The message of his letter is very clear – having overestimated your revenue, you will now commence sacking staff to find money in your budget for long overdue repairs and upgrades.

You do your employees, who you hired, by the way, a great disservice by publicly denouncing the “small minority of academics who do not contribute significantly.” If you want alumni, staff and students to speak well of you, how about you start by speaking well of them? I myself am finding it increasingly difficult to speak well of an institution that continues to show its disdain for the people who work so hard to make it a success.

Your letter speaks of the fall in “income” received from local and international students as a result of the GFC. Ironic to be complaining of a loss of revenue from fees while the University moves to “accelerate some of the organisational changes” it has been planning (i.e., sacking people) which will no doubt lead to under staffing and a drop in new enrolments.

And I’m sorry, but a record surplus is still a record surplus, however you look at it. What’s more, it is the upper management of your university who are responsible for its financial management. I doubt any of them will be taking the “voluntary” redundancies you will be “offering” those who are actually living your “tradition of excellence” every single day.

Let me tell you my experience with your institution, an experience that no amount of formally worded letters or copies of the alumni magazine or monogrammed pens will alter.

In the time I studied at USYD, I saw the new school of law built. What it must have cost to build, let alone heat and cool such a state-of-the art glass-and-polished-concrete monstrosity with 4 metre wide hallways, I shudder to think. It took 3 years to rip out all the car parks from Camperdown campus and pave them over with cobblestones, some of which later had to be dug up as the paths were too bumpy to facilitate disabled access. I saw the new sci-tech library built, and the bridge between Camperdown and Darlington Campuses inexplicably demolished and replaced with a new, uglier bridge. In short, I saw god knows how many billions of dollars spent on the construction of new facilities, which could have been spent on staffing, or, god forbid, student welfare. So you’ll forgive me if I find it hard to believe that the University doesn’t have the funds – or the means to obtain them – to carry out repairs.

So what DID I wish for in my time at your noble institution? Was it more state-of-the-art libraries? More polished concrete flooring? More sculptural chaise lounges to recline on between classes? “Core values” for the organisation?

No. I’ll tell you what I wanted. More books in the library, especially those required as course readers. More lecturers and tutors. Smaller tutorial sizes. Increased contact hours. More water fountains. You know, the basics.

I feel the you must live in a completely different world from the one I inhabit. It seems to me that in your world, students are customers, alumni are brand ambassadors, and staff are absolutely dispensable. If this be the case, all I can say is I am thankful to have graduated from your institution so as to no longer have to deal with such an attitude.

So when you wonder why your revenue from enrolments has dropped, maybe you could ask your students. When you wonder why your “brand” is losing appeal, and your “core values” aren’t being adhered to, maybe you could ask your staff. No doubt they think the same as I do, an “integral part of your university” as I am.

Warm regards,

Lauren Quinn B. Arts 2011