New Zealand university plans biggest ever job cuts

AUT plans for steepest job losses in the country since the pandemic’s early months as international and domestic enrolments flag

September 7, 2022
Old rusty horseshoes hanging upside down on a wire fence, New Zealand.
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A prolonged border closure, rising costs, static funding and declining domestic enrolments have taken their toll on one of New Zealand’s top-ranked universities, which has proposed the biggest staff restructure in its 22-year history.

Auckland University of Technology (AUT) said a “post-Covid recovery programme” precipitated by plunging student numbers could reduce its workforce of 2,178 permanent and contract staff by up to 230, in full-time equivalent terms.

AUT expects this year’s enrolments to fall to the lowest level since 2013, 900 (5 per cent) below last year in full-time equivalent terms. Fee-paying international enrolments are down by about 400 from 2021 and are projected to decline by another 250 or so in 2023, in the wake of a two-year suspension of visa processing.

Domestic enrolments are projected to fall by more than 500 below 2021 levels this year and to remain depressed for at least three more years. AUT blames “a buoyant employment market and the increasing number of school-leavers needing to go into the workforce for economic reasons”.

The university plans to cut seven degree courses in which enrolments “can no longer support the staffing levels required”. Teaching staff will be deemed “surplus” once the courses finish on 25 November, along with those from courses that are viable only with “reduced staffing”.

In total, the institution wants to save some NZ$21 million (£11 million) by jettisoning the equivalent of 150 full-time academics and 80 full-time professional staff. Final numbers are expected to be determined on 19 October after consultations conclude five days earlier.

The university also plans to wind down “non-core activities” that “do not have the business driver they once did”, according to a consultation document. These include an astronomical observatory, an English language school, an early childhood centre and drone and textile design laboratories.

“AUT’s fundamentals are sound, but we have a responsibility to…ensure our future sustainability,” said the university’s recently installed vice-chancellor, Damon Salesa.

The proposal is the biggest staff-shedding exercise in New Zealand academia since 243 employees accepted redundancy as part of the University of Auckland’s 2020 “voluntary leaving scheme” – one of a rash of Covid-induced severance programmes that year.

But Massey University last month released a “proposal for change” affecting general administration and finance staff. While Massey has declined to say how many positions are targeted, the Tertiary Education Union (TEU) believes 150 jobs could go.

The TEU said the AUT proposals were a “slap in the face” that, unlike restructures elsewhere, targeted mainly academics. “Staff cuts are never the way to address temporary fluctuations in student numbers,” said assistant national secretary Irena Brörens. “They only result in unsustainable workloads and reduced service for students.”

The union’s AUT organiser, Jill Jones, said the cuts were “unnecessary” given that the university had almost doubled its 2020 surplus to about NZ$13 million last year.

New Zealand universities have been increasingly stretched in recent years, as government funding failed to keep pace with inflation. AUT said it was “uniquely financially exposed” among the country’s eight institutions because its net revenue per student was about one-third lower than the sector average, even though it was extremely reliant on student fees.

It said its staffing costs were proportionally the highest in the sector, at about 64 per cent of total operating expenses. “To effectively manage our business over the next decade, total staffing costs need to sit below 60 per cent of operating costs given our heavy reliance on student-derived revenues,” the consultation document says.

It says staffing costs have risen by 19 per cent since 2015, with property costs up by 8 per cent and other costs by 10 per cent. Current “inflationary pressures”, including an 8 per cent pay rise claim next year, “will directly contribute to the financial challenges”.

The TEU says universities have been underinvesting in their staff for years. Education minister Chris Hipkins insists that the sector’s financial position is “very robust”.

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