DePauw University to lay off 56 current employees

Citing a “challenged annual operating budget,” DePauw University officials announced Tuesday the layoff of 41 full-time and 15 part-time employees.

Additionally, 14 vacant full-time and two part-time positions will not be filled.

Faculty members have also been offered a voluntary retirement incentive plan.

The reduction in force comes at the end of extensive studies not only into DePauw’s finances, but also comparisons of the university to similar institutions.

University President Mark McCoy announced the moves to faculty and staff, but also reached out to the Banner Graphic Tuesday afternoon to discuss the matter.

Mark McCoy

“People probably understand that DePauw has a strong balance sheet. We have a large endowment and a beautiful campus,” McCoy said. “But we have a very challenged annual operating budget that we have had for a very long time.”

McCoy went on to explain the benchmarking exercise that he and the board of trustees had gone through to see how DePauw compares to the most financially successful schools of its type across the country.

Reducing a list of 107 schools to 14 of similar size that operate with a balanced budget or surplus, the DePauw administrators discovered they use a lot more employees than their peers.

“Benchmarking against those schools, we recognized that we have somewhere between 20 and 60 more faculty, even though we have the same number of students, and we have 125 more staff,” McCoy said.

“Today DePauw announced that we were offering a voluntary retirement program for our faculty,” McCoy added, “and that even though the number of staff is 125 (above average), we have eliminated 41 full-time administrative and staff positions, 16 of which are eligible to retire.”

Staff members and administrators who were informed Tuesday will remain employed with DePauw through June 30.

More employees are eligible to retire under new terms announced by the university on Tuesday.

“We have lowered the retirement number from 80, which is your age plus your experience level, to 65,” McCoy said. “So staff that are involved in the restructuring who meet the rule of 65 can retire.

“The 25 others will need to transition,” he added. “We have transition services on campus. We have a robust buyout option.”

The buyout option will include a lump sum of either six months of pay or two weeks of pay for each year of service, whichever is more. The employees will also receive a COBRA subsidy equal to three months of coverage cost.

“No one will get less than six months of pay,” McCoy said. “For the people to whom we’ve announced this today, in February, they will be taken care of until next January.”

Additionally, the university will pay for career counseling and transition services.

“We have outplacement services available to them for the remainder of this semester,” McCoy said. “We will work with them, giving them liberal leave and doing everything in our power to help place those staff that are impacted by this.”

McCoy added that the elimination of 17 part-time positions represents a reduced reliance on part-time staff.

While a severance package will also be offered to part-timers, there will be no six-month minimum.

As for faculty, any reductions will be voluntary.

“On the faculty side, we are offering two years of pay if they meet the rule of 65 and make next year their final year,” McCoy said.

Eligible faculty members who choose to retire effective June 30, 2020 will receive two years of base salary and retirement benefits, including health insurance.

McCoy emphasized that while these actions are a negative, the university is trying to make these moves while it is still operating from a position of relative financial strength.

“What we want people to understand is that DePauw is doing this in a moment of strength, while our endowment is strong, the returns are strong,” McCoy said. “And while we’re doing well we want to be able to do this now, where we can treat our employees with dignity and respect with this robust separation agreement, rather than wait until it’s too late.”

With 759 university employees, the 56 layoffs represent seven percent of the DePauw workforce.

The administration and staff layoffs also do not seem to be tied to seniority or level of employment, as they include six full-time administrators, 19 full-time salaried staff and 16 full-time hourly staff.

The vacant positions not being refilled also include four administrators.

In a letter to members of the DePauw community, McCoy and Kathy Patterson Vrabeck, who chairs the board of trustees, said the restructuring is part of a two-pronged approach to building upon DePauw’s strengths. While one part of this is realignment of resources, the other is to “aggressively invest in our students, programs and campus.”

“Accordingly, we are finalizing plans for new student housing and the renovation of our library, implementing our campus energy master plan and endowed student leadership initiative and increasing scholarship support,” McCoy and Vrabeck wrote.

McCoy and Vrabeck closed their letter by stating their commitment to “ensuring that DePauw can build upon an unsurpassed student experience and achieve our vision as a university of choice and distinction for generations to come.”