CHICAGO (WBBM NEWSRADIO) -- Northwestern University is tightening its budget as it expects two years of financial turbulence due to COVID-19 pandemic.
Northwestern Unversity sent a letter to the community Monday to provide a financial update, which included the announcement of plans to furlough about 250 staff members, as it anticipates a a $90 million budget shortfall this year, a likely another significant shortfall in the 2021 fiscal year, perhaps as great as or greater than the one in 2020.
"We want to thank you for the collective resolve and teamwork you have displayed in recent weeks as we respond to the COVID-19 pandemic that has upended all of our lives. At a moment such as this, we are proud to be a part of a forward-looking, caring community. So many of our people have made remarkable personal sacrifices," said Morton Schapiro, President and Professor; Kathleen Hagerty, Interim Provost and Professor; and Craig Johnson, Senior Vice President for Business and Finance, in the letter. "We expect to see repercussions from the pandemic for some time. Most of our work involves bringing large numbers of people together—in classrooms, dormitories, hospitals, libraries, laboratories, meeting rooms, concert halls and athletic arenas. As such, a pandemic places extreme pressure on all our major functions and on associated revenue streams."
The university plans to continue efforts that were announced last month, which include hiring restrictions, a pause on University travel and discretionary spending, and deferral of most facilities projects.
It also plans to temporarily increase the rate at which it draws from its endowment; have University leaders taking a pay reduction; suspend the university's five percent automatic contribution and five percent matched contribution to retirement plans; and furlough about 250 staff members whose workloads are being reduced during the move to limited and mostly remote operations.
"As we have noted previously, our approach is guided by a commitment to protect the academic excellence that this community has built up over 169 years and to prioritize the well-being of our people," the university wrote in the letter.
Northwestern said notifications to affected staff will begin Monday, and their furloughs will begin over the next few weeks, likely lasting through the summer quarter.