Sister and husband are University employees, very concerned about layoffs

[Lynx310650]

Asking this on behalf of my sister. She's in her mid 30s, husband is about 10 years older. Both work for a very large prominent university. Not faculty, they are administrative staff.

After the recent NIH grant issues and potential upcoming endowment tax increase (her employer would be one of the universities that would be hit) she's getting quite nervous about her job as are a lot of her co-workers. This worry is doubled because her husband also works for the university.

Their financial picture is pretty decent, retirement balance is around $1M in 403bs and IRAs. 6 month expenses in cash. No pension.

They are renters, no children.

Their employer has a very well defined layoff system that includes pre-determined severance amounts that are based on experience and seem quite generous. They have both been there a long time (in my sister's case her entire professional career) so the net combined amount they'd get in severance in the event of a layoff would be enough to cover about 1.5 year's worth of expenses. So in some sense they have almost 2 years worth of emergency cash that they'd have in the event of a layoff.

The pertinent questions they have now are:

(1) Usually if there is an impending layoff you want to look for a job ASAP. My sister and her husband however really enjoy working for the university and don't want to leave prematurely. If/when the endowment taxes hit, there's almost no way the university will avoid laying off staff, but there's a chance they may survive anyway. Their positions are not really impacted by the NIH funding issues, so it would be the tax that does them in, so this could be more of a problem that arises in 2027. So they have some time, but even then they don't want to leave for another job necessarily. But willing to entertain why this may not be prudent.

(2) Financially, the big question is whether to beef up the emergency cash. After expenses, their leftover money goes to 403b contributions, IRA, HSA, and a very small amount to taxable brokerage. They could slow or stop the 403 contributions (except for the match), HSA, etc to divert more money to savings. But again, they have 6 months cash and the severance mentioned above.

[livesoft]

So other than hunker down, what else can they do? I think: Nothing. There is no escape.

[Ependytis]

1. It never hurts to look for a job while they have jobs. Just brushing up their resumes, looking at job sites, updating your LinkedIn contacts, and being prepared is a good way to deal with the worry.

2. Financially, they have nothing to worry about. They should be able to get a job within the timeframe that they get a severance.

[Lynx310650]

So other than hunker down, what else can they do? I think: Nothing. There is no escape.

Yea, I think their big financial question right now is whether to keep maxing retirement accounts or divert everything to beefing up emergency fund as high as they can.

[stan1]

There are hundreds of thousands of faculty, staff, and students wondering the same thing and not knowing what is going to happen with funding from NIH, NSF, and other federal sources. Some of the largest universities have over $1B of various types of new start federal funding each year. The impact on the campuses, affiliated hospitals, and communities is obvious once you realize the money is there.

It's difficult to know what to advise, but if at least one of them has a solid track to commercial employment it might be worthwhile to make that transition sooner than later, as you wrote.

Good that they are renters and have a good financial base to start with.

[Mike Scott]

It seems a little premature for them to do anything more than be aware for now. Universities may be in for a rollercoaster ride but we don't actually know yet how funding will be impacted. There is a lot of uncertainty at the moment and it will take time to sort out real world effects.

[Weathering]

Have them expand their network within the university. Sometimes, when one group has layoffs there are still other groups hiring. This will give them the best chance of having employment with the university even if their current roles are eliminated.
As an example, This past week, many California public universities cut/reduced their NCAA sports programs. The students are certainly impacted (saw lots of media about that) but so are those employed in the athletic departments. Hopefully, they have networked and know the other opportunities available so they can again be employed by the university in some capacity.

[RetiredAL]

So other than hunker down, what else can they do? I think: Nothing. There is no escape.

Yea, I think their big financial question right now is whether to keep maxing retirement accounts or divert everything to beefing up emergency fund as high as they can.

Taxable in this case may be the preferred route. Yeah, it's never as tax efficient, but it can be more readily tapped into if needed.

Just my 2 bits.

[JoeJohnson]

Do they have access to 457(b) plan? I believe no penalty for early withdrawals if you lose your job whereas 403(b) does face penalty.

Agree with the advice to start / increase networking. Are they employable in the private sector or is there function very specific to higher ed?

One note of caution: Even if they are not directly impacted by NIH, the entire university will face cutbacks.

[retired@50]

So other than hunker down, what else can they do? I think: Nothing. There is no escape.

Yea, I think their big financial question right now is whether to keep maxing retirement accounts or divert everything to beefing up emergency fund as high as they can.

They know their future job prospects the best. If they're worried about finding future employment, then beef up the emergency fund.

Regards,

[adamthesmythe]

There is reason for those working at universities to be concerned- very concerned. It is not known whether we are going to see a large reduction in size of the post-secondary educational system or not. For years it has been clear to me that too many students were going to college and that prices had gotten out of hand, largely because of administrative bloat and mission creep. But if the outcome of the present troubles is an overall decline in upper-rank research and educational institutions then we have more than just a problem for employees- we have a recipe for decline of the nation.

But to the specific case. An employee's vulnerability depends a great deal on what exactly they do. I think we all know where most of the animus is directed and can make some judgement about how extreme the action required will be. A problem about looking for other jobs is that we may well be facing a policy-induced recession that will limit other opportunities. Networking is never a bad idea however.

It does seem to me that with the prospect of a decent severance package it is undesirable to pass up any employer match in order to build up an emergency fund. Depending on overall financial position some belt-tightening might be in order, at least until we understand how destructive this is going to be.

[Harmanic]

(2) Financially, the big question is whether to beef up the emergency cash. After expenses, their leftover money goes to 403b contributions, IRA, HSA, and a very small amount to taxable brokerage. They could slow or stop the 403 contributions (except for the match), HSA, etc to divert more money to savings. But again, they have 6 months cash and the severance mentioned above.

They will also likely qualify for unemployment.

[mhc]

Welcome to the world of uncertainty. It is rough. Many of us lived with this for decades. It helps if one is a top performer, but if the cuts are deep enough, no one is safe.

With severance, 2 years cash seems plenty. They should have a plan to cut expenses if need be, but 2 years gives a lot of time for finding the next job.

Everyone should have a plan B and maybe plan C ready to go at all times. It is always good to be networking to have contacts in place. It is even good to have an updated resume, LinkedIn, or whatever else people use now.

[InMyDreams]

Contribute to Roth accounts, instead of tax-deferred? That way they could pull out their contributions tax-free if such were needed.

[Dottie57]

So other than hunker down, what else can they do? I think: Nothing. There is no escape.

Yea, I think their big financial question right now is whether to keep maxing retirement accounts or divert everything to beefing up emergency fund as high as they can.

Yes I would beef up emergency funds.

Update resumes - yes.

Start looking - yes.

Look at items that could get cut or eliminated if necessary - yes.

[nisiprius]

Beef up the emergency fund, yes. At least you can get bank accounts with 4% APY's pretty easily right now, maybe even at their existing bank, so financially it's not as painful as it would have been a decade ago.

Reread What Color Is My Parachute?. Cultivate the potential job-seeking network. Find out what "a résumé" looks like these days and update it, with fashionable structure for a printed page and also a version that is structured for electronics. Don't go crazy reading résumé advice books, but do rough one out. Back in 2009 everyone was advised to prepare an "ASCII résumé" but I don't know what the modern equivalent is.

Set up a LinkedIn account if they don't already have one.

Set up a Monster.com account if they don't already have one and familiarize themselves with doing job searches.

Find out if the state they live in has a state-run job listing board. Do some web searches and familiarize themselves with how unemployment works in their state, and, if possible, what the benefit is likely to be.

They should think about personal items they keep in their offices, and consider bringing some of them home if they are bulky or valuable or have great sentimental value. Even in a well-executed layoff, employees are given limited time and a limited number of boxes to carry out. A university probably will be somewhat friendly about such things, but still.

Think about health insurance. COBRA? One spouse goes on the other's insurance? ACA? Maybe set up an account at their state's "marketplace" website and spend a few minutes familiarizing themselves with it and trying to make some rough cost estimate.

[rjbraun]

Their employer has a very well defined layoff system that includes pre-determined severance amounts that are based on experience and seem quite generous. They have both been there a long time (in my sister's case her entire professional career) so the net combined amount they'd get in severance in the event of a layoff would be enough to cover about 1.5 year's worth of expenses. So in some sense they have almost 2 years worth of emergency cash that they'd have in the event of a layoff.

Is the very well-defined layoff system contractual or is this just the way the university has always acted in the past?

Personally, I would be concerned that if things were to get really bad (which doesn't seem out of the realm of possibility these days), then instead of generous severance terms the university gave all terminated workers, say, only two weeks. (Even if it's more than two weeks, it seems like there's a lot of room between two weeks and enough to cover 1.5 years of living expenses for OP's sister and BIL.

I'm not clear why that wouldn't be a real possibility if things went south. (Even if thing don't go south, I'm not clear why that might not happen. But, okay, maybe it's not in the university's DNA to not be generous in separations, but I would argue that all bets may be off in a situation where a university is struggling to stay open and solvent.

[123]

..Their employer has a very well defined layoff system that includes pre-determined severance amounts that are based on experience and seem quite generous...

When funding turmoil hits an organization a lot of internal systems and priorities can fall by the wayside in the interest of expediency and staying above water. Positions in administrative areas are usually ripe for consolidation/elimination/outsourcing. Older workers often end up being targeted for elimination because they are more resistant to change. Targeting can happen without raising EEO issues because the organization can eliminate whole sections or departments where older workers might predominate under a number of pretenses.

If the road appears to be getting rocky it may be time to choose a different path.

I've worked in financial services and seen reorgs where an entire skyscraper floor of employees (200- 250) were terminated within a month when the company outsourced the work

[stan1]

Their employer has a very well defined layoff system that includes pre-determined severance amounts that are based on experience and seem quite generous. They have both been there a long time (in my sister's case her entire professional career) so the net combined amount they'd get in severance in the event of a layoff would be enough to cover about 1.5 year's worth of expenses. So in some sense they have almost 2 years worth of emergency cash that they'd have in the event of a layoff.

Is the very well-defined layoff system contractual or is this just the way the university has always acted in the past?

Personally, I would be concerned that if things were to get really bad (which doesn't seem out of the realm of possibility these days), then instead of generous severance terms the university gave all terminated workers, say, only two weeks. (Even if it's more than two weeks, it seems like there's a lot of room between two weeks and enough to cover 1.5 years of living expenses for OP's sister and BIL.

I'm not clear why that wouldn't be a real possibility if things went south. (Even if thing don't go south, I'm not clear why that might not happen. But, okay, maybe it's not in the university's DNA to not be generous in separations, but I would argue that all bets may be off in a situation where a university is struggling to stay open and solvent.

I was thinking same, public vs private, union contract, and state specific laws. Some universities will move quickly (I read that at least one large private university has put in place a hiring freeze). The public universities will have a long road ahead depending upon what eventually happens over a period of a few years.

[HomeStretch]

They will likely receive meaningful severance and be eligible for unemployment benefits. How large is their current emergency fund? Sure they can beef it up a bit and perhaps trim expenses. Aside from that, I don’t see the need to stop all retirement contributions in order to contribute to a Taxable account.

[delamer]

There is a lot to be said for a married couple having diversification in the industries and occupations that they work in.

So yes, it would be a good idea for one of them to start looking for a job outside the university.

[Randomstroller]

The couple seems to have a generous emergency fund in place and it is stated they won't be effected until 2027, if then.

Even if they got new jobs tomorrow, would those be guaranteed to last until 2027?

That said, of course update resumes, build their networks, look at other opportunities, but I see no reason to panic. If possible, consider taking on new roles at work to build marketable skills, and/or consider relevant training.

As mentioned above, it would be good to know if their severance is protected by contract or merely by custom. Also as mentioned above, have they factored unemployment benefits into their emergency options?

When I was 40, I took a job expecting it to last no more than 2-3 years. When the facility folded, right on schedule, I walked away with almost 6 months severance and found a new better paying job in 6 weeks.

I contributed to my retirement accounts to the maximum allowed year in, year out, through job outlooks both fabulous and dire. But maybe that's just me.

[8foot7]

There is a lot to be said for a married couple having diversification in the industries and occupations that they work in.

So yes, it would be a good idea for one of them to start looking for a job outside the university.

This is the most obvious actionable advice for the current situation. Too many income eggs in one basket with a target on it. One spouse should find private employment.

[beardsicles]

There is a lot to be said for a married couple having diversification in the industries and occupations that they work in.

So yes, it would be a good idea for one of them to start looking for a job outside the university.

This is the most obvious actionable advice for the current situation. Too many income eggs in one basket with a target on it. One spouse should find private employment.

I’ve commented before on this new-to-white-collar America phenomenon: we’re effectively seeing entire occupations wiped out by federal funding cuts. If you work for the Feds or a federally funded program, there often aren’t private sector jobs in your discipline, or if there are, they require retooling. It’s remarkable.

[Cletus Davenport]

This is the most obvious actionable advice for the current situation. Too many income eggs in one basket with a target on it. One spouse should find private employment.

I’ve commented before on this new-to-white-collar America phenomenon: we’re effectively seeing entire occupations wiped out by federal funding cuts. If you work for the Feds or a federally funded program, there often aren’t private sector jobs in your discipline, or if there are, they require retooling. It’s remarkable.

*AND* you will be competing for those positions with potentially thousands of other displaced university employees from all over the country.

User WillThrill was a prolific poster here, and I think a college professor. Related to, but apart from this, he would post from tie to time about the looming “enrollment cliff” in higher education; a demographic shift where the number of new high school grads each year would drop by 15% over the next five years.

With all that, and rapid rise of adjunct professors in place of tenured professors, it sounds like being a university employee is going to be a tough row to hoe.

I’d recommend keep getting the match. Both should update the resumes are start looking for other jobs. The wolf is always at the door. If they haven’t had “industry job interviews” in a while, they should do a few for practice. And hopefully they go great, and they get some good options.

All the best to them!

[TravelforFun]

I would at a minimum:

- Contribute enough money to the 457b to get the match and that 's it
- Beef up emergency fund
Suspend large purchases
- Schedule necessary medical procedures now
- Make a copy of their work at the university, if allowed
- Update their resumes, LinkedIn profiles
- Activily monitor external job market and let their network know they're available for job considerations

TravelforFun

[beardsicles]

This is the most obvious actionable advice for the current situation. Too many income eggs in one basket with a target on it. One spouse should find private employment.

I’ve commented before on this new-to-white-collar America phenomenon: we’re effectively seeing entire occupations wiped out by federal funding cuts. If you work for the Feds or a federally funded program, there often aren’t private sector jobs in your discipline, or if there are, they require retooling. It’s remarkable.

It’s not just universities. I have two friends who worked for USAID. Friends who worked for consulting shops that worked with USAID. Friends in nonprofits who were funded by USAID. All lost their jobs, firms closed up, non-profits looking at 50% workforce reductions. Basically the entire humanitarian sector (exaggerating, but only slightly) was federally funded.

[LoveTheBogle]

$1 million
Renters
No kids

They have substantially more options than most people. Look for a job that doesn’t rely on federal monies.

[mrsbetsy]

[Unnecessary comment removed by moderator oldcomputerguy]

We worked in the medical device field in the Silicon Valley from 1987 - 2020. Companies gobbled up other companies and there were times when jobs lasted 2 years before jumping to another. Also times when employment wasn't easy to find.

I realize being university employees gave them a sense of security, but that's not the way it all works anymore. Keep resumes updated and networks fluid.

We are in for a bumpy few years. Buckle up!

Good they have no children to support so they have more options on the table.

[Mudpuppy]

Asking this on behalf of my sister. She's in her mid 30s, husband is about 10 years older. Both work for a very large prominent university. Not faculty, they are administrative staff.

Depending on their staff roles, they should assess how their skills can pivot to other sectors. For example, a university fundraiser might be able to pivot to a similar role at a charitable or private foundation. Similarly, an HR or payroll person have very transferable skills to the private sector.

Some university staff roles are pretty educationally specific though, like an academic advisor. If their employable skills are tied to the educational sector, they should see if their university offers any course fee waivers to staff members. If so, they should consider taking courses in another employment area, rather than hope they can pivot to another educational job. I have heard so many friends from grad school saying they'll become a high school teacher if they lose their university job, that I know it won't be a viable path for all of them.

[avecmoi]

Contribute to Roth accounts, instead of tax-deferred? That way they could pull out their contributions tax-free if such were needed.

+1

[Katietsu]

I am not sure diverting savings from the retirement account makes sense. It depends on the details. If there is a job loss the money in a 403b or 457b would be available for withdrawal. If there is a 457b, there is no penalty for early withdrawal. There is a 10% penalty from the 403b, but the tax rate might be lower. If I continued fully contributing to the retirement accounts, I would consider using something safer, even a money market or stable value option, for a portion of those savings.

This forum does not allow speculation on future legislation. I believe one reason is that these bills inevitably get changed or they just fade away. I think uncertainty is the greatest certainty.

[Northern Flicker]

They have both been there a long time (in my sister's case her entire professional career) so the net combined amount they'd get in severance in the event of a layoff would be enough to cover about 1.5 year's worth of expenses. So in some sense they have almost 2 years worth of emergency cash that they'd have in the event of a layoff.

It should last longer if you factor in unemployment compensation.

They have to make their own decision, but if I were in that situation, I would not reduce retirement account contributions. If they are laid off, their income will go down, and they likely would be able to manage withdrawals of the contributed funds in pieces in the zero federal bracket if they are needed, paying only the 10% penalty. They will save more deferring the taxes on the contributions. And there probably is a match they would forfeit. They can withdraw the matching funds in any bracket and come out ahead relative to forfeiting the match.

In that situation, I would be updating resumes/linkedin/whatever and networking.

[UM70]

No experience evaluating the detailed financial tactics. I was always simple-minded and whenever serious uncertainty popped up I just put everything into my bank savings accounts until things cleared.

However, I did successfully change industries over the years and while challenging it's very doable. Google "how to change industries" and the AI has a very helpful response

[8foot7]

I’ve commented before on this new-to-white-collar America phenomenon: we’re effectively seeing entire occupations wiped out by federal funding cuts. If you work for the Feds or a federally funded program, there often aren’t private sector jobs in your discipline, or if there are, they require retooling. It’s remarkable.

*AND* you will be competing for those positions with potentially thousands of other displaced university employees from all over the country.

User WillThrill was a prolific poster here, and I think a college professor. Related to, but apart from this, he would post from tie to time about the looming “enrollment cliff” in higher education; a demographic shift where the number of new high school grads each year would drop by 15% over the next five years.

With all that, and rapid rise of adjunct professors in place of tenured professors, it sounds like being a university employee is going to be a tough row to hoe.

I’d recommend keep getting the match. Both should update the resumes are start looking for other jobs. The wolf is always at the door. If they haven’t had “industry job interviews” in a while, they should do a few for practice. And hopefully they go great, and they get some good options.

All the best to them!

All the more reason to start early.

[8foot7]

Their employer has a very well defined layoff system that includes pre-determined severance amounts that are based on experience and seem quite generous. They have both been there a long time (in my sister's case her entire professional career) so the net combined amount they'd get in severance in the event of a layoff would be enough to cover about 1.5 year's worth of expenses. So in some sense they have almost 2 years worth of emergency cash that they'd have in the event of a layoff.

Is the very well-defined layoff system contractual or is this just the way the university has always acted in the past?

Personally, I would be concerned that if things were to get really bad (which doesn't seem out of the realm of possibility these days), then instead of generous severance terms the university gave all terminated workers, say, only two weeks. (Even if it's more than two weeks, it seems like there's a lot of room between two weeks and enough to cover 1.5 years of living expenses for OP's sister and BIL.

I'm not clear why that wouldn't be a real possibility if things went south. (Even if thing don't go south, I'm not clear why that might not happen. But, okay, maybe it's not in the university's DNA to not be generous in separations, but I would argue that all bets may be off in a situation where a university is struggling to stay open and solvent.

This is also good advice. You can never, ever bet on the generosity of an employer or institution during a funding emergency. The rules in the handbook can go out the window in the worst way, particularly if the money in the handbook is from a source that is volatile and not owned entirely by the institution.

[Valuethinker]

1. It never hurts to look for a job while they have jobs. Just brushing up their resumes, looking at job sites, updating your LinkedIn contacts, and being prepared is a good way to deal with the worry.

I agree. But see below. Nowhere may be safe. And they would have less seniority somewhere else.

2. Financially, they have nothing to worry about. They should be able to get a job within the timeframe that they get a severance.

The problem is this is sectoral, not just one university. The whole higher education sector will be hit. Their university may not be near other universities, or (thinking California as an example) it may hit all of the public universities together. The implication (large Endowment) is they work for a private university, and definitely they will all be hit together.

Small liberal arts colleges were already in trouble due to changing demographics (except for the most selective ones). But this is going to hit big research universities as well.

[ROIGuy]

Over the next 20 years or so of working, they're not going to miss a couple months of additional retitement savings. Adding to their cash /emergency fund nest egg for possible future layoffs I think has more value or at the very least may give them a little more peace of mind. In this case, short-term savings has more value than long-term.

[JackoC]

This forum does not allow speculation on future legislation. I believe one reason is that these bills inevitably get changed or they just fade away. I think uncertainty is the greatest certainty.

Yeah, and legislation could become an aspect of this (tax changes for endowments would basically have to be). But enacted legislation is pretty concrete while proposed legislation is all over the map in likelihood of going anywhere. Just refusing to spend time debating which legislative proposals will or should get enacted seems reasonable. Here it's so far (attempted) executive action and unfinished court cases. What has 'really happened' v 'speculation' on what will happen is much less clear than with legislation. But it can't be ignored as a university employee. Especially administrative, given the conventional wisdom that blames growth in overhead for much of the explosion in college costs (though I don't know how realistically that can be taken in isolation from other factors, and I'm sure we shouldn't debate it here).

People have callings and you can't figure love, but two incomes that close together would be avoided if neglecting those two things. A kid and spouse have employment uncertainty issue working basically same job for two not-for-profits, not about federal policy, just one not-for-profit's old money trust owner is tired of being so far (in the red) away from zero profit. And it's probably not a coincidence that's the more generous job relative to qualifications. And somewhat like this situation in microcosm the local area won't suddenly provide other similar jobs if there's a big cutback at the one. If working at a U is not a calling, one job in the (for profit) private sector would seem a wise medium term goal and no reason to delay starting. Though I can see how that mightn't sound brilliantly helpful at the moment.

[Admiral]

I have worked (and still work) at a large Ivy League research university, with (potentially) hundreds of millions of dollars in NIH funding at stake. We have a v large endowment. Here is my perspective, in addition to some facts on the ground.

First, while some of the posts on this thread include good advice (have a solid emergency fund...which is good advice at all times), some are alarmist, IMO. I try to take the position that saving for retirement when the markets are down is, in general, a good strategy. Those of us who kept investing in 2008 and didn't panic did very well. I tend not to look at my portfolio when the markets are tanking, I just keep my head down.

With the exception of staff that is directly funded by grant money, I do not expect we will see layoffs. We didn't in 2008, and I don't expect we will now. Early retirement offers (ie attrition)? Yes. Well-resourced universities have lots of ways they can cut costs.

This is what is happening here now:
Reduced enrollment
Hiring freeze
Freeze on non-essential capital projects
Freeze on reclassifications (ie non-merit increases)

This alone can save tens of millions of dollars, though not hundreds. And, again, this is a well-resourced institution.

Obviously any staff position can be cut at any time. That said, if these people are not grant funded and are reasonably senior (which I assume they are if they have $1m saved) then they should just stay the course and not panic.

Hopefully like the rest of us they will soon be tired of winning.

[neowiser]

Universities cannot function without administrators, so unless their jobs are truly expendable it seems too soon to worry excessively about layoffs. They can expect their jobs to get much harder, doing more work with less support. Universities also tend to function like small governments, where seniority is valued over other considerations. New hires will likely be laid off first. I'm not sure if it's true at private universities, but at state universities there is an implicit understanding that everyone earns less than they would in the public sector in exchange for job security and good benefits.

Unlike public sector bosses, university decision makers tend to favor transparency and plenty of advanced notice about potential layoffs. They are well prepared to weather a period of unemployment for one or both of them, there is no need for action unless they receive more definitive signals that their jobs are in jeopardy.

[ResearchMed]

I have worked (and still work) at a large Ivy League research university, with (potentially) hundreds of millions of dollars in NIH funding at stake. We have a v large endowment. Here is my perspective, in addition to some facts on the ground.
...
With the exception of staff that is directly funded by grant money, I do not expect we will see layoffs. We didn't in 2008, and I don't expect we will now. Early retirement offers (ie attrition)? Yes. Well-resourced universities have lots of ways they can cut costs.
...
This is what is happening here now:
...
Hiring freeze
...
Hopefully like the rest of us they will soon be tired of winning.

[emphasis added]


Our major private university could almost be where Admiral is.

All I've heard definitively just now from DH is about the hiring freeze.
I assume there is more to be heard.

DH is recently *very* part time (after >50 years of teaching and admin), and he is funded solely by a private grant. He works more like full time because he likes what he does. And this Funder keeps asking him to renew, so... They say something about being on the long term grant list, which almost seems to get rubber stamped for renewals, absent any malfeasance or such.

All he needs is a few part time research assistants, but he hasn't hired them yet...
So...???
I guess we'll find out.

<MORE BAD NEWS font>
I'm sure there will be more, alas.
<Do Not End MORE BAD NEWS font>

RM

[RickBoglehead]

This is a great example (except for the relatives) of the risk in both working for the same employer. Clearly one has to weigh the opportunity (challenge of job, pay, benefits, etc.) against the risk (both losing their jobs). Or, the anxiety it creates even if they don't lose their jobs.

I had an employee who convinced us to hire his wife for a role. Within 6 months we had a layoff, and new to hires were top of the list, so she went. He pleaded with me, but my hands were tied. CEO said "life's tough".

I would have more than a 6 month emergency fund if both people work for the same entity.

[Valuethinker]

Over the next 20 years or so of working, they're not going to miss a couple months of additional retitement savings. Adding to their cash /emergency fund nest egg for possible future layoffs I think has more value or at the very least may give them a little more peace of mind. In this case, short-term savings has more value than long-term.

I think this is good analysis.

A change in job may even involve a change in industry, or geographic location. It can be gut-wrenching in mid-life. And "2 body problem" in that one, or both, could be in that situation. Situations can emerge where one partner is laid off, and has to relocate for a new role, and the original partner is still with the previous university - thus, needing 2 places of residence, and not one. (I know of academic marriages that have been that way for decades).

So liquidity is all. Reduce planned long term savings, and concentrate on building emergency liquidity reserves. (EXCEPTION: if there is an employer match, it's important to get that).

To be clear, I don't think anyone is (yet) suggesting that OP start cashing in their long term investments (taxable in particular) or move them to a more conservative asset allocation. Just stop adding to them, beyond getting any employer match.

It can easily take a year or more to find another, comparable, role. There may be a period of freelancing. Or a complete career change. Some of the likely avenues (such as government work) from a career in university administration are not available.

[Valuethinker]

I have worked (and still work) at a large Ivy League research university, with (potentially) hundreds of millions of dollars in NIH funding at stake. We have a v large endowment. Here is my perspective, in addition to some facts on the ground.

First, while some of the posts on this thread include good advice (have a solid emergency fund...which is good advice at all times), some are alarmist, IMO. I try to take the position that saving for retirement when the markets are down is, in general, a good strategy. Those of us who kept investing in 2008 and didn't panic did very well. I tend not to look at my portfolio when the markets are tanking, I just keep my head down.

With the exception of staff that is directly funded by grant money, I do not expect we will see layoffs. We didn't in 2008, and I don't expect we will now. Early retirement offers (ie attrition)? Yes. Well-resourced universities have lots of ways they can cut costs.

This is what is happening here now:
Reduced enrollment
Hiring freeze
Freeze on non-essential capital projects
Freeze on reclassifications (ie non-merit increases)

This alone can save tens of millions of dollars, though not hundreds. And, again, this is a well-resourced institution.

Obviously any staff position can be cut at any time. That said, if these people are not grant funded and are reasonably senior (which I assume they are if they have $1m saved) then they should just stay the course and not panic.

Hopefully like the rest of us they will soon be tired of winning.

We always have to consider the possibility that "the past is not a good guide to the future".

It's absolutely true that there's a long gap between announced policy and actual legal outcomes.

But things are moving very fast. There was an agenda, and it is being executed at lightspeed.

The losses in university research income are very real. Endowment? That's a different issue - presumably legislation will have to be passed (but again, enunciated policy). But the whole thing does have a 2008-in-financial-services feel about it - but for different sectors. I know people in the US foreign aid field, for example.

If one is in a sector that is in the target hairs, well, one has to be ready to take cover. Sauve qui peut.

[SeekingSecurity]

I have worked (and still work) at a large Ivy League research university, with (potentially) hundreds of millions of dollars in NIH funding at stake. We have a v large endowment. Here is my perspective, in addition to some facts on the ground.
...
With the exception of staff that is directly funded by grant money, I do not expect we will see layoffs. We didn't in 2008, and I don't expect we will now. Early retirement offers (ie attrition)? Yes. Well-resourced universities have lots of ways they can cut costs.
...
This is what is happening here now:
...
Hiring freeze
...
Hopefully like the rest of us they will soon be tired of winning.

[emphasis added]


Our major private university could almost be where Admiral is.

All I've heard definitively just now from DH is about the hiring freeze.
I assume there is more to be heard.

DH is recently *very* part time (after >50 years of teaching and admin), and he is funded solely by a private grant. He works more like full time because he likes what he does. And this Funder keeps asking him to renew, so... They say something about being on the long term grant list, which almost seems to get rubber stamped for renewals, absent any malfeasance or such.

All he needs is a few part time research assistants, but he hasn't hired them yet...
So...???
I guess we'll find out.

<MORE BAD NEWS font>
I'm sure there will be more, alas.
<Do Not End MORE BAD NEWS font>

RM

I'm at a smaller, but also well-resourced institution. Enrollments are down. We're not in an official hiring freeze, but may as well be. Very few new positions are being approved, and many positions we are losing by attrition are not being filled. I've heard that early retirement offers will be announced soon. According to sources like Inside Higher Ed and the Chronicle of Higher Ed, the landscape across higher ed looks much the same, and it looks much worse at smaller, less prestigious, and/or less well-resourced institutions.

We've seen some of this coming for a long time (demographic cliff). Some of the expected pain started coming at us faster than expected post-pandemic, but the last six weeks have dramatically accelerated the process. As institutions that are at least partly tuition driven start seeking higher net tuition revenue, I worry about the consequences for kids coming from less-advantaged backgrounds. I was one of those kids, and a generous scholarship was life changing for me! Endowment-driven places will feel a different kind of pain depending on what happens in the markets.

Unless they are both in roles essential roles, I would second the advice to see if at least one of them can find employment elsewhere, possibly outside of higher ed. It might feel premature, but probably better to find a new position from a position of strength (still employed).

[JackoC]

With the exception of staff that is directly funded by grant money, I do not expect we will see layoffs. We didn't in 2008, and I don't expect we will now. Early retirement offers (ie attrition)? Yes. Well-resourced universities have lots of ways they can cut costs.

Overall you surely know better than I. However 2008 is probably not that useful a comparison. The 'epicenter' then was elsewhere, now it (or one of them) is universities. In both 2008 and 1987 plenty of fin insts, where the epicenter was, that didn't collapse, laid off large %'s, up to almost everybody, in various grades (incoming 'associates' for example*) and departments. Then again financial institutions aren't universities.

*every institution has a natural tendency to get rid of less senior, cheaper, people because that raises less question as to why you need the expensive manager making that decision if they declare people nearer their own level expendable, with whom their personal relationships also tend to be closer. That natural tendency though may be overcome in for profit institutions seriously seeking the greatest cost reduction for the least loss of capability which would rarely be achieved doing it by seniority. In non-profit/govt sector (as well as unionized settings) firing by seniority tends to be viewed as a virtue in itself (or even contractually required). No value judgement there, but that is relative good news for more senior workers at those places.

[finite_difference]

Overheads for grants could also be regulated to be less than the current 55%+ rates at some universities.

[just frank]

Academic here (with tenure), who has heard the same chatter from my large Uni.

We didn't lay anyone off during the financial crisis. We had a hiring freeze and a pay raise freeze.

Endowments are up >20% in the last two years, so increasing the taxes by that much would just seem to take us back to 2022 endowment income, when we were still building buildings everywhere and hiring like mad.

My Uni, like most, doesn't use endowment income for operations or payroll... its earmarked for growth and financial aid. I'd be more worried about halting growth and reducing financial aid (which is considered cheap PR but expendable) rather than mass layoffs to student support staff (which is used to compete for the best students).

I wouldn't panic.

[maroon]

HI Lynx310650! Very rarely is a question posted that is at all relevant to my area of expertise, but this might be one of them as I've served as grants director at a state research university.

When I worked for a university, after then 2008 financial crisis there weren't mass layoffs but staffers didn't get pay raises for ~5 years unless they got promoted. (Tenured faculty continued to receive their annual pay increases.) I can't say what university leaders are currently considering, but pay freezes for staffers might be on the list.

If your sister and her husband are grant administrators/managers, my suggestion is to consider similar positions at the state/county/municipal level. This is what I'm doing now; I enjoy the work and I'm still in the same retirement system as when I worked at the state university. Skills are very transferable and I'm not noticing any layoff panic among my colleagues, possibly because the headcount is smaller to begin with. (The administrative bloat at ~some~ universities is real, in my opinion.)