University Issues Hire Freeze as Financial Hit Looms

The University of Auckland has announced a hiring freeze on new staff as it faces revenue losses as a result of the government’s coronavirus travel restrictions.

Vice-Chancellor Stuart McCutcheon said in a staff email on the 28th February that the restrictions have a “significant impact” on the university’s finances, as it faces a $30 million loss of revenue in the first semester, the equivalent to the entire operating surplus that it is required by the government to make this year.

“I very much regret the need to take this step, particularly as I am conscious of the fact that the travel ban is placing an additional burden on many of our staff.”

“However, the government decision to prevent our students travelling to New Zealand has placed us in a very difficult and uncertain situation, and poses a significant risk to the financial health of the University.” 

“I hope that the ban will soon be removed and that we will then be able to review, and ideally lift, this freeze on staff hiring.”

Positions affected by the hiring freeze included all academic and professional staff, fixed term positions that are not research-funded and new contracts for services.

Teaching Assistants, research-funded positions and short-term jobs supporting the response to the coronavirus will not be affected.

Victoria University’s Vice-Chancellor Grant Guilford warned the following Monday it is considering lay-offs of its staff to reduce a $12 million loss.

Responding to Craccum, an Auckland University spokesperson said the hiring freeze will not affect current staff.  While all currently unfilled roles across the University are affected by the freeze, positions “crucial” to providing services to students will be exempted.

However, the statement did not outline which services are considered “crucial”.

The university also says there are no plans to lay off staff or change wages or benefits but if the travel restrictions continues, “we may have to look at other initiatives”.

A tutor in the university’s Tuākana programme, a mentoring service supporting undergraduate Māori and Pacific students, told Craccum they still have not received their contracts and that this will affect his livelihood.

The University has confirmed to Craccum that the freeze will not affect Tuākana tutors and the delay is unrelated to the COVID-19 outbreak.

“My understanding is that they’re expecting us to work and then get back paid when the freeze finishes.”

“I’ve had to look for alternative work which means I have 8am starts and finished work at 10pm. It’s gonna be hard.”

“I understand that they are mandated to maintain the operating surplus, however, their financial statements are available online and they have billions in assets that could be sold.”

“Tuākana isn’t just the University having morals. There are Treaty obligations that they have to uphold so I find it odd that these weren’t exempt from the freeze.”

Michael Gilchrist, National President of the Tertiary Education Union (TEU), told 95bFM’s The Wire that the university should not be using staff to cover financial losses, and it needs to work with the government to find alternative solutions.

“Drawing a straight line from these losses to staff cuts is totally unacceptable.”

“These institutions, especially like Auckland University, have reserves that they can use to buffer these shocks.”

“They also need to start talking nationally with other institutions and with the government about ways of offsetting these losses.”

“I think that the government can relax some of its requirements for the university to hit some of its targets in terms of their projected enrolments, and also the requirement to show a surplus.”

New Zealand Union of Students’ Associations President Isabella Lenihan-Ikin also believes it is inappropriate to reduce staff numbers, despite financial difficulties.

She says hiring freezes and possible redundancies at a time when full staffing capacity is needed at tertiary institutions will affect not only staff, but all students as well.

“The coronavirus is already increasing the workload of many staff, and this will only worsen the situation.”

“Important class offerings and crucial student services will be cut, and as a result the remain[ing] staff will experience an even greater workload.”

“The government needs to financially support tertiary institutions during this time, as they have done with the $11 million injection into the tourism industry, and the financial strain caused by COVID-19 should not fall on institutions alone.”

Current travel restrictions implemented by the government have been expanded from mainland China to include Iran, after New Zealand confirmed three positive coronavirus cases.

The first case is a New Zealand citizen in their 60s who travelled from Iran via Bali, and had previously tested negative twice.

The second patient is a New Zealand citizen in their 30s who returned from a trip to northern Italy.

The third case, a New Zealand resident in his 40s, has no connections to the first two cases and had not recently travelled, but his family members had recently travelled to Iran.

In addition, those who have been to South Korea and northern Italy are required to self-isolate for 14 days upon returning to New Zealand.

If you believe you could have the coronavirus, stay at home and contact Healthline’s dedicated coronavirus hotline on 0800 358 5453 (+64 9 358 5453 on an international SIM).