Vice-chancellors slash more than 17,000 university jobs

Australia’s financially troubled universities have been forced to slash the jobs of more than 17,000 staff after losing an estimated AU$1.8 billion (US$1.37 billion) in revenue.

Vice-chancellors are facing their grimmest economic times following decades of continuous growth in enrolments and expansion of the higher education system.

Almost 130,500 university employees have been affected by the cuts, either directly after being sacked or by having to make up for the loss of their colleagues by taking on heavier workloads.

In 2020 universities employed 100,000 full-time staff and another 30,500 part-time staff, and it is the latter group that has faced the worst of the job shedding.

Students have also been affected by the cuts, with many having to change their timetables and even switch to new courses when their expected lecturers suddenly disappeared.

Universities Australia Chief Executive Catriona Jackson said universities’ operating revenue had fallen by nearly 5% in 2020 compared with the previous year.

The higher education sector is estimated to lose a further 5.5%, or at least AU$2 billion, in 2021.

“When compared with universities’ pre-pandemic budgeted revenue for 2020, this loss amounts to more than AU$3 billion,” Jackson said.

“The brutal reality of COVID-19 has made 2021 even more challenging.”

But, as Jackson also pointed out, universities face a multi-year hit to their revenues, as international students are likely to reconsider studying at an Australian university that is facing challenging times.

“If an international student does not enrol in 2020, the loss will be felt for what would have been their entire three or four years at university,” she noted.

Australia’s continuing border closures mean universities face the ‘double whammy’ of fewer returning students in 2020, and reduced numbers in 2021, Jackson said.

In addition, the cumulative impact will be felt not just in 2020 but in 2021 and for years to come.

“No sector can absorb revenue declines this large without staff losses. At least 17,300 jobs have been lost on campuses in 2020,” she said.

Universities had worked hard to limit job losses by halting infrastructure projects, making tough decisions about courses and trying to generate savings wherever they could.

“But the effect of COVID-19 on the higher education sector has come at a real cost and unfortunately, it is probable we will see further reductions this year.

“The loss of any and every one of those staff is personally devastating, bad for the university community, and Australia’s knowledge reservoir,” she said.

Not surprisingly, vice-chancellors warmly welcomed a federal government injection of AU$1 billion (US$762 million) for research in October last year. They said this was an important acknowledgement that the jobs of the future were created by R&D – and that universities were central to national recovery.

“Universities provide a ‘standing army’ of research capability that can tackle the challenges and seize the opportunities,” Jackson said.

“And Universities Australia will continue to advocate for the needs of the sector at this time of crisis and will continue to talk with government about funding sustainability.”

With the new figures at hand, Jackson and her team are expected to urge the federal government to develop a long-term plan for research funding ahead of the government’s May budget.

Although the scale of job and revenue losses varied between universities, Jackson said no institution was spared financial pain, with the collapse in revenue from international students the major cause of budget pressures.

“As a sector, universities have gone from being AU$2.3 billion in surplus in 2019 to being AU$369 million in deficit in 2020.

“Budgeting has been really tough right across the sector. A very large city university with lots of international students will have had a big hit, while in some universities in regional areas there are very serious challenges around delaying really important capital works,” she said.

Declining revenues

The grim reality facing the nation’s higher education system, however, is that universities’ operating revenues fell 4.9%, or AU$1.8 billion in 2020 compared with 2019 figures and vice-chancellors predict a further AU$2 billion decline this year.

Jackson noted that foreign student fees are a highly lucrative revenue source for universities, which collectively banked AU$10 billion (US$7.6 billion) from students in 2019 – a huge sum that accounted for 27% of their total operating revenue.

But the ongoing uncertainty around Australia’s international border, which has been closed for 10 months, has exposed the over-reliance by universities on the fees to cross-subsidise research programmes.

Last December, many universities reported steep declines in early applications and enrolments for semester one, fuelling concerns that Australia was at risk of losing market share to rival countries such as Canada and Britain, which have opened their borders to offshore students.

Federal Education Minister Alan Tudge warned the higher education sector last month that it would be “very difficult” for international students to return in large numbers to campuses this year.

Tudge has appealed to offshore students to begin their studies online.