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University of Michigan freezes hiring, employee raises due to COVID-19 pandemic

University of Michigan President Mark Schlissel (Photo: Gerald R. Ford School of Public Policy)

ANN ARBOR – The University of Michigan has announced new cost-saving measures as it grapples with reduced revenue and unforeseen expenses related to the coronavirus pandemic.

The measures include the freezing of hiring and employee raises through the end of the 2020-21 budget year, voluntary staff furloughs and reduced hours, elimination of non-essential expenditures and postponement of construction projects.

In an email to university faculty and staff on April 20, President Mark Schlissel said that the university estimates losses of $400 million to $1 billion by the end of the year across all three campuses and Michigan Medicine.

“Virtually all sources of revenue the university relies on for daily operations are in question,” wrote Schlissel. “At the same time, we are managing new costs that arose quickly.”

He said that new costs were primarily for pandemic response at U-M’s hospital and clinics. The university also issued rebates for student housing and dining and refunds for employee parking amid the outbreak, which added to losses.

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“These were the right thing to do to support our community, but were not part of our normal budget or monthly cash flow calculations,” wrote Schlissel. “Additionally, the need for financial aid will likely increase as the families of many of our students have experienced reductions in income.”

On the revenue side, Schlissel said demand for classes remains uncertain at this time as does “our ability to safely bring students to campus, the nationwide economic slowdown, potentially greater needs for patient care, and levels of state support and federal research funding that may decrease significantly.”

Schlissel also revealed that he and many in U-M’s leadership will be taking pay cuts.

“I have decided to cut my own monthly salary by 10 percent starting May 1 through the end of this calendar year,” wrote Schlissel.

Similarly, both chancellors at U-M Dearborn and Flint have volunteered to cut their salaries by 10 percent, and the remaining executive officers, athletic director and chief diversity officer have elected to reduce their salaries by 5 percent.

Although he made clear the dire situation facing the university, he said he believes U-M can overcome the pandemic.

“The University of Michigan is an institution that has stood the test of time for more than 200 years,” Schlissel added. “While it will not be easy, U-M will overcome this pandemic and we will — as we always have — uphold our public mission and the promise we have made to those we serve.”

To read Schlissel’s full letter, click here.

About the Author:

Meredith has worked for WDIV since August 2017 and was voted one of Washtenaw County's best journalists in 2019 by eCurrent's readers. She covers the community of Ann Arbor and has a Master's degree in International Broadcast Journalism from City University London, UK.