The stoniest of the sandstone universities is wielding the axe. And it’s the global financial crisis’ fault, apparently.
MELBOURNE University will slash 220 full-time academic and administrative staff because its financial position has taken a battering in the economic crisis.
In an email to staff, vice-chancellor Glyn Davis said the crisis had devastated investment returns and a so-called ‘‘economic response program’’ would result in 50 academic and 50 administrative staff taking voluntary redundancies.”The University of Melbourne has income from students, it has income from research, it has income from its endowment and with the global financial crisis unfortunately the income from the endowment that’s been built up over 150 years has collapsed,” he said.
Ah, yes, the endowment. At its peak, the fund was worth well over a billion dollars, a considerable fraction of that courtesy of the mugs who were silly enough to pay Melbourne University $85 million for the Melbourne IT domain name business when it floated at the peak of the dot-com craziness a decade ago.
Undoubtedly, the endowment has taken a bit of a battering over the last year or two, but – unless they had the entire thing in subprime mortgage securities and ABC Learning shares – it’s presumably still well over half a billion dollars, and likely to bounce back over the next decade. So, unless I’m missing something the University of Melbourne could easily afford to dip into its endowment capital to cope with the bad times. Presumably they were reinvesting much of the income from the endowment, big-time, during the years of bumper returns on investment. That’s the point of an enduring institution like a university having a big endowment, isn’t it?
Here’s Davis’s full memo, courtesy of the Oz.