Northwestern announces 250 furloughs, $90M budget shortfall

Top leaders are also taking pay cuts of up to 20 percent to deal with the fallout from the COVID-19 pandemic.

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Northwestern University in Evanston

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Due to revenue losses caused by the pandemic, Northwestern University on Monday announced plans to furlough about 250 workers, reduce salaries for university leaders, suspend contributions to retirement plans and draw more heavily on its endowment fund.

The measures were enacted to help address a projected $90 million budget shortfall this year, university leadership said in a message to the Northwestern community.

“Even if we resume on-campus activity in the fall, as we hope to do by phases, we are likely to see a significant shortfall in the 2021 fiscal year as well, perhaps as great as or greater than what we are experiencing this year,” the note signed by President Morton Schapiro said. 

University leaders will be taking a 10% to 20% cut in pay. A 5% automatic contribution and 5% matched contribution to retirement plans will be suspended. The 250 workers who are being furloughed are staff members who are unable to work remotely or whose workloads have been significantly reduced.

“We expect to see repercussions from the pandemic for some time. Most of our work involves bringing large numbers of people together — in classrooms, dormitories, hospitals, libraries, laboratories, meeting rooms, concert halls and athletic arenas. As such, a pandemic places extreme pressure on all our major functions and on associated revenue streams,” the message said.

The announcement comes weeks after the university announced other belt-tightening measures that included hiring restrictions, a pause on university travel and discretionary spending, and deferral of most facilities projects.

The university last month decided not to accept $8.5 million in federal stimulus money that it was allocated as part of the CARES Act — a decision that followed the lead of Harvard, Princeton, Stanford, Yale and Duke universities.

Northwestern’s endowment was $11.1 billion last year, the 12th largest in the nation.

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