Dartmouth announces cost cutting, hiring freeze

(Joseph Mehling photo)
Dartmouth president James Wright: "Revenue is down significantly."

By Peter Schworm, Globe Staff

Dartmouth College president James Wright announced a range of cost-cutting measures yesterday in the latest sign that the financial downturn is hurting the nation's colleges and universities.

In an e-mail sent to the Dartmouth community, Wright wrote that "revenue is down significantly because of declining endowment performance," and that the university must reduce its staff to offset its losses. He called for cuts of $40 million over the next two fiscal years to prevent cuts in financial aid.

Dartmouth's move follows similar cutbacks by Harvard, Columbia, Boston University, and other institutions that are facing steep declines in endowments. Dartmouth's endowment dropped $220 million from July through September to $3.4 billion.

"As we have received more information about how the volatile economy has affected the college, we now recognize that it will not be possible to reduce the budget at this level without cutting back our compensation expenses," Wright wrote. "Attrition will be the preferred approach to this, but it is not likely to be sufficient to meet our objectives."

Wright, who is stepping down in June, also called for freezing new hires and deferring some construction projects. Several other projects, including a life sciences center, a business school complex, and a baseball park, will proceed as planned.

The announcement followed a weekend meeting on the college's financial projections with its board of trustees. Dartmouth officials will accelerate the college's budget timetable to identify specific cuts.

Earlier this week, Columbia University's president, Lee C. Bollinger, announced a comprehensive budget review.

"We can also anticipate greater demands on financial aid and the possibility of other losses in tuition revenue," Bollinger wrote to students, faculty, and staff. "The grant environment, which has already contracted in recent years, may well deteriorate further. And we have no way of knowing whether we will be able to maintain our currently robust fund-raising successes."

Harvard, the world's wealthiest university, announced Monday that it would conduct an across-the-board appraisal of its finances with an eye on wage and budget freezes.

"We must recognize that Harvard is not invulnerable to the seismic financial shocks in the larger world," Drew Faust, Harvard's president, wrote in an e-mail to faculty, staff, students, and alumni. "Our own economic landscape has been significantly altered."

Faust cited a recent estimate from Moody's Investors Service that projects a 30 percent decline in the value of college and university endowments this fiscal year. Many higher education specialists expect colleges to raise tuition to compensate.

In late September, BU President Robert A. Brown called for an immediate hiring freeze and a moratorium on pending construction projects as a precautionary step against "uncertainties created by the upheavals in the financial markets and the nation's poor economic outlook."

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