Sister and husband are University employees, very concerned about layoffs

[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.

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.

A small point, but I’d guess they are working for a private university rather than a public one. There was a concern about possible endowment taxes, in addition to the federal funding declines.

But we definitely are in agreement about the need for diversification.

[delbcavista]

diversification is a good thing. it seems like now would be a good time for spouses to have different employers with all that is going on right now if one has the drive and skills to look for a different job. also seems like not necessarily a great time to jump ship. I'd really try to understand the severance thing described - if it's not 100% solid and legally dependable, seems like the right time to boost emergency savings if there's a chance both could lose jobs around the same time. I wish I had a more positive take for you right now

[just frank]

Universities are historically counter-cyclical. I wouldn't leave one on rumors and plans not yet enacted.

In a rare scenario where layoffs might occur, they would start with new hires, of which there are usually many.

My advice was for private uni, not public ones as others have supposed.

[AlphaLess]

In 2008, I was new at a large trading bank in NY.
A bunch of us were meeting with senior execs.

One of them - forget his name - was a good speaker, and a straight shooter.

This is what he told us:
- I am telling all my subordinates to cut costs,
- if you have two houses, sell one,
- if you have 4 cars, sell 2,
- if your kids are in private school, consider bringing them back to private,
- if you have 3 vacations planned, cut down to 1.

Why? We are going into a deep depression.

He was not wrong. He was prescient.

My advice to you folks: go do all of the above.

[itsmeagain]

In 2008, I was new at a large trading bank in NY.
A bunch of us were meeting with senior execs.

One of them - forget his name - was a good speaker, and a straight shooter.

This is what he told us:
- I am telling all my subordinates to cut costs,
- if you have two houses, sell one,
- if you have 4 cars, sell 2,
- if your kids are in private school, consider bringing them back to private,
- if you have 3 vacations planned, cut down to 1.

Why? We are going into a deep depression.

He was not wrong. He was prescient.

My advice to you folks: go do all of the above.

Interesting story, thanks for sharing it.

[delbcavista]

In 2008, I was new at a large trading bank in NY.
A bunch of us were meeting with senior execs.

One of them - forget his name - was a good speaker, and a straight shooter.

This is what he told us:
- I am telling all my subordinates to cut costs,
- if you have two houses, sell one,
- if you have 4 cars, sell 2,
- if your kids are in private school, consider bringing them back to private,
- if you have 3 vacations planned, cut down to 1.

Why? We are going into a deep depression.

He was not wrong. He was prescient.

My advice to you folks: go do all of the above.

This gave me chills. I would like this person to tell me right now what to do. It's a good reminder just in general too because all of these actionable items, while a bummer like cancelling vacation etc, were not life basic life needs related but saved a lot of cash

[LadyGeek]

I removed several off-topic posts regarding political aspects of upcoming layoffs. Please stay focused on the financial aspects.

[greg24]

This is what he told us:
- I am telling all my subordinates to cut costs,
- if you have two houses, sell one,
- if you have 4 cars, sell 2,
- if your kids are in private school, consider bringing them back to private,
- if you have 3 vacations planned, cut down to 1.

My advice to you folks: go do all of the above.

This is great advice, advising university employees to sell their second homes and fourth cars.

[SeekingSecurity]

This is what he told us:
- I am telling all my subordinates to cut costs,
- if you have two houses, sell one,
- if you have 4 cars, sell 2,
- if your kids are in private school, consider bringing them back to private,
- if you have 3 vacations planned, cut down to 1.

My advice to you folks: go do all of the above.

This is great advice, advising university employees to sell their second homes and fourth cars.

Well, maybe the coaches. LOL!

[just frank]

This is great advice, advising university employees to sell their second homes and fourth cars.

Haha, exactly. Like govt civil servants, most academics are taking a lower salary (compared to for-profit companies) to obtain a lower pressure, more flexible and more secure job.

[Mudpuppy]

This is great advice, advising university employees to sell their second homes and fourth cars.

To be fair, all the OP has said about their family's positions is that they are "administrative staff", which covers a broad salary range from low-to-mid 5 figures for entry-level staff all the way up to a comfortable 6 figures for the VP/CIO/CFO level. That's also why it's hard to give specific advice about possibly pivoting to the private sector. We have no idea what they're doing now, so we can't recommend specific comparable job sectors to investigate.

[afan]

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.

A small point, but I’d guess they are working for a private university rather than a public one. There was a concern about possible endowment taxes, in addition to the federal funding declines.

But we definitely are in agreement about the need for diversification.

Some public universities have both large endowments and large amounts of revenue from federal grants. University of Texas, for example.

[afan]

This is great advice, advising university employees to sell their second homes and fourth cars.

Haha, exactly. Like govt civil servants, most academics are taking a lower salary (compared to for-profit companies) to obtain a lower pressure, more flexible and more secure job.

Well, I know a lot of faculty members whose entire careers depend on steadily producing grant money. Without that, their tenure might keep the on, at the minimum salary, but no labs, no employees, no publications and no future. Living on those grants is as pressure-packed as any private job. Tenure does not mean they will pay you like a well-funded person running a big lab when the money dries up.

And faculty members without tenure eat what they kill. No funding-no job

[Valuethinker]

Haha, exactly. Like govt civil servants, most academics are taking a lower salary (compared to for-profit companies) to obtain a lower pressure, more flexible and more secure job.

Well, I know a lot of faculty members whose entire careers depend on steadily producing grant money. Without that, their tenure might keep the on, at the minimum salary, but no labs, no employees, no publications and no future. Living on those grants is as pressure-packed as any private job. Tenure does not mean they will pay you like a well-funded person running a big lab when the money dries up.

And faculty members without tenure eat what they kill. No funding-no job

I have a friend who is a professor in engineering. They have over 20 people working for them. That's not unusual in STEM subjects. Much of their time is spent applying for grants and managing the various research projects.

I believe the US courts have upheld the principle that a university *can* lay off tenured staff, if it is part of a broader restructuring?

With Federal grants cut off, much basic research in universities will just stop. And the whole raison d'etre of a large research university is suddenly in question. Only the very richest private university endowments could even dream of filling the gap - and the trustees of same have due regard to the future? (ie the university cannot just "raid" the endowment to meet an operating deficit?).

[just frank]

Haha, exactly. Like govt civil servants, most academics are taking a lower salary (compared to for-profit companies) to obtain a lower pressure, more flexible and more secure job.

Well, I know a lot of faculty members whose entire careers depend on steadily producing grant money. Without that, their tenure might keep the on, at the minimum salary, but no labs, no employees, no publications and no future. Living on those grants is as pressure-packed as any private job. Tenure does not mean they will pay you like a well-funded person running a big lab when the money dries up.

And faculty members without tenure eat what they kill. No funding-no job

Tell me about it, LOL. But even running a big lab, most could still make more money in private industry, but with annual reviews and exposure to the business cycle.

The cut of grant money that goes to salary has been steadily squeezed down over the last couple decades. In my case the fraction of 'bonus' I get per dollar of grant has been reduced by 75% over my career. Even for productive faculty, the 'bonus' from grants for most faculty is 10-20% of base salary (assuming 9 mos base salary). Folks in biomed with tenured position with only 3 mos base salary would be another story...

And before we panic too much... we are not talking about eliminating all govt science funding, they are talking about cutting it 'only' 50-70%. And that doesn't count foundation money, which currently is about half of the academic research pie (and a higher fraction in biomed).

In a 25-35% overall cut scenario, the big fish will still be doing research, and its the little fish that will get squeezed. Unis will hire fewer young people, and a lot of older folks will just wind down their research.

Based on the last 30 years of this, I can see us getting a haircut this year, and partial restoration the year after, and everything bumping along, just a bit more squeezed than it was. Same old, same old.

[Mudpuppy]

I believe the US courts have upheld the principle that a university *can* lay off tenured staff, if it is part of a broader restructuring?

Tenure does not mean someone cannot be fired/laid off. It does raise the "bar" for such actions, but it doesn't forbid them. Budget cuts are definitely a case where tenured people can be laid off. But this doesn't apply to the OP, since their family members are administrative staff and not faculty members. Staff usually do not have tenure, although they might have seniority during layoffs, depending on the terms of their contract.

[greg24]

In a 25-35% overall cut scenario, the big fish will still be doing research, and its the little fish that will get squeezed.

During the enrollment decline, larger universities have thrived while smaller ones have struggled. This will exacerbate that trend.

[Harmanic]

In a 25-35% overall cut scenario, the big fish will still be doing research, and its the little fish that will get squeezed.

During the enrollment decline, larger universities have thrived while smaller ones have struggled. This will exacerbate that trend.

Normally that is true, but this time, funding cuts are hitting the R1 institution harder, especially those with medical schools. Some will do better than others, but everyone is going to be feeling the pressure.

[Bagels]

An R1 institution is a doctoral university that the Carnegie Foundation classifies as having very high research activity.
How are R1 institutions selected?
To be classified as R1, a university must meet certain thresholds for research spending and doctoral degree production.
For 2025, the threshold is $50 million in research expenditures and 70 doctoral degrees

—source: Google

[afan]

Only the very richest private university endowments could even dream of filling the gap - and the trustees of same have due regard to the future? (ie the university cannot just "raid" the endowment to meet an operating deficit?).

Those richest private universities have hundreds of millions to billions in government grants and contracts. They could not possibly cover losses of that magnitude.

Even if they had the money, those endowments are not just one huge pile of money. At a giant university there would be hundreds to thousands of different endowments. Universities may report the total but they cannot spend money specified for, say, financial aid to support research. They cannot use money donated for the English department to support the bioengineering department.

That endowment money has to last in perpetuity. They cannot spend it down now with no solid expectation of a resumption in higher levels of federal revenue.

Tenured faculty are in a better position than staff but certainly not completely protected. If the cuts turn out to be as large as promised, even tenured faculty could be laid off. In this case, it might not be only the least productive. If someone is running a large and productive lab, then that is likely expensive and require many indirect dollars to keep it going. Someone who needs only a computer and an office could be easier to keep around.

[delamer]

A small point, but I’d guess they are working for a private university rather than a public one. There was a concern about possible endowment taxes, in addition to the federal funding declines.

But we definitely are in agreement about the need for diversification.

Some public universities have both large endowments and large amounts of revenue from federal grants. University of Texas, for example.

Yes, I’m aware of that fact which is why I used the verb “guess.”

But getting back to my original point, having both spouses’ incomes tied to the same institution isn’t ideal. Especially right now, but in general.

[CoAndy]

This is what he told us:
- I am telling all my subordinates to cut costs,
- if you have two houses, sell one,
- if you have 4 cars, sell 2,
- if your kids are in private school, consider bringing them back to private,
- if you have 3 vacations planned, cut down to 1.

My advice to you folks: go do all of the above.

This is great advice, advising university employees to sell their second homes and fourth cars.

That example quoted was given at a major New York City trading bank, not a university.

[adamthesmythe]

This is great advice, advising university employees to sell their second homes and fourth cars.

That example quoted was given at a major New York City trading bank, not a university.

I was working at a university at that time, and I don't remember anything much changing. I was able to keep all four of my cars. (Just kidding, there).

In 2010 I took advantage of lower prices to buy a vacation house.

[celia]

DH and I were both laid off in the same month from different types of jobs and industries and it lasted for a year. We had kids in faith-based schools (ie, paying tuition) that we wanted to keep for them. I had a good severance package and we both collected unemployment.

We survived by cutting down wherever possible and I enjoyed the change in routine, especially since we also had a toddler.

My suggestion is for one of them to find a different type of work in a non-academic setting. In other words, don't keep all your eggs in one basket.

[afan]

Staying on the question at hand, I agree that it would be important to plan for loss of one and of both incomes. Both should be looking for better jobs elsewhere, if for no other reason then to avoid having both jobs depend on a single institution. If this university is the dominant employer in town and leaving the current job would mean moving elsewhere, then it becomes much tougher.
It would seem extreme to quit the current jobs now unless something clearly better came along. Things are very fluid and we do not know how many of the cutbacks will stick. Even some federal people who have been fired have been rehired and the future will depend on the courts and the political process- not topics for discussion on bogleheads, but it is not at all clear that everyone who has been fired has actually lost their job. And the couple in question have not been told of any layoffs.

[AlphaLess]

This is what he told us:
- I am telling all my subordinates to cut costs,
- if you have two houses, sell one,
- if you have 4 cars, sell 2,
- if your kids are in private school, consider bringing them back to private,
- if you have 3 vacations planned, cut down to 1.

My advice to you folks: go do all of the above.

This is great advice, advising university employees to sell their second homes and fourth cars.

You have to take this with a grain of salt. It is an advice to LWBYM: Live WAY below your means. And I mean, WAY. Economic depression imminent.