RPInsider

Well, I guess The Notorious B.I.G. was wrong. At least recently… As I’m sure you all know, the economy is officially in a recession. The federal government is bailing out American automakers, and even countries like Canada are getting in on the bailout action. Want to know something that is apparently recession proof? (Hint: it isn’t our endowment.) Alcohol. People will tend to buy cheaper alcohol instead of the pricier stuff during hard economic times. (Bros, can you go cheaper than natty light? Water?)

How does this economic situation affect RPI? Well, according to the email that Dr. Jackson sent out to the Rensselaer Community:

… we have determined that it will not be possible to reduce the budget sufficiently without reducing our recurring compensation expenses, which make up half of the Institute’s operating budget. Staffing reductions will be necessary. We would prefer to rely on attrition, but it will not be adequate to meet our financial objectives. Each vice president and portfolio owner has examined their respective operations for reductions in staff, in a way that will enable greater efficiency, improved performance, and elimination of redundancy.

We will manage the required staffing reductions as compassionately as possible…

At least they’re firing people compassionately?! The institute laid off 98 employees this past week.  No faculty positions are expected to be cut though, so that’s (relatively) good news for us students. But I can’t imagine being laid off right before the holidays. I would have hoped that RPI would have valued their employees a bit more to find the money in other places.

The biggest thing that I wish for in this situation is more information. I don’t know how many students know about this since most of us have headed home for winter break. The school has said very little publicly about the matter. This leaves us to look in the paper and read other blogs for information? The real way to combat any rumors is open communication. At least then we can all hopefully understand the reasoning behind the decisions.

Hopefully this will be the last that the economy hurts the RPI community. I’d like to not get forwarded another email in the coming months saying that some professors are being let go “compassionately.”

Our hearts go out to the those who have been affected by this situation during the holiday season.

EDIT 12/28: A number of facebook groups have spring up voicing concern with the issue.

Full email below.

To:   The Rensselaer Community

From: Shirley Ann Jackson, Ph.D.

President and Professor of Physics

Date: December 11, 2008

Re:   Impact of Economic Crisis

I write to you today to discuss the economic challenges we continue to face, and to provide an update on our efforts to meet those challenges.

In my October communication to you, I noted the major investments we have made under the Rensselaer Plan – in faculty hiring, in research, in student life, and in capital renewal. These investments have led to new academic offerings, a research renaissance at Rensselaer, and a surge in student demand.  These accomplishments portend well for our future.

As you are all no doubt aware, both domestic and international financial markets have experienced unprecedented turmoil, and have sustained significant losses over the past three months. As the economic picture worsened quickly and dramatically in September, we took prudent, proactive steps to weather the ongoing global financial storm. In my message to the Rensselaer community on October 10, 2008, I described the steps we were taking to address this economic downturn and its impact on our budget. We put a hiring freeze in place for both faculty and staff, with the exception of strategically important searches.  We also enacted contingent non-salary budget reductions, and then further reduced each portfolio’s operational expenses in areas such as travel, advertising, and consulting services. The hiring freeze and these non-salary budget reductions will remain in place. We will complete major capital projects already underway, but defer beginning new ones. Many much wealthier institutions are taking similar actions now.

Unfortunately, the global and national economic crisis, and its impact on endowments – including our own – have worsened considerably since my October 10 communication.  Rensselaer, like other institutions, has been affected by the overall market downturn, and our endowment has been impacted accordingly. All our major revenue sources (tuition, gifts, research, and endowment income) will likely be impacted over the next several years.  In so fluid and unpredictable a financial environment, it is particularly important to manage risk as we respond to changing circumstances. While we remain strong, managing risk will require further budget reductions.

We must be concerned with how the economy may adversely impact our students and their families. We will continue to work closely with our current and future students to mitigate sudden changes in their financial circumstances that may threaten their ability to attend or remain at Rensselaer.  We will preserve financial aid and continue to provide an accessible education for our students. We will protect our academic enterprise, the foundation of which are the tenured and tenure-track faculty. We will do all we can to support our staff, who have diligently enabled our academic and student life programs throughout this transformative period.

As the economy has worsened, and we have analyzed how it has affected, and will continue to affect, Rensselaer, we have determined that it will not be possible to reduce the budget sufficiently without reducing our recurring compensation expenses, which make up half of the Institute’s operating budget. Staffing reductions will be necessary. We would prefer to rely on attrition, but it will not be adequate to meet our financial objectives. Each vice president and portfolio owner has examined their respective operations for reductions in staff, in a way that will enable greater efficiency, improved performance, and elimination of redundancy.

We will manage the required staffing reductions as compassionately as possible. We will take such steps in the coming week.

Thank you for your continued commitment and support of Rensselaer through these very challenging times. These types of actions are difficult for any organization. I know that they are very difficult for each of us, personally, and especially for those directly affected. No one can yet anticipate when the global and national economic situation will turn around. The months ahead will not be easy. We, therefore, must reaffirm our commitment to one another and to Rensselaer, knowing that we all will have to work harder, and more efficiently, to meet these challenges, and to carry out our educational and research mission. But we also know that, with preparation and hard work, Rensselaer will emerge from this difficult period stronger and more resilient than it has ever been, with great accomplishments behind us and greater ones before us.

Again, I thank you for your generosity of spirit, and for your support, during these challenging times.

Share economy, employees, layoffs