Layoffs due to recession stopped after June

Cambridge Council criticizes MIT for resorting to layoffs during the crunch

The wave of layoffs at MIT due to the recent economic downturn was over as of June, according to Vice President of Human Resources Alison Alden. Between January 2009 and June 2010, MIT laid off 174 employees in an effort to cut the 2010 and 2011 fiscal year budgets by about $125 million collectively.

Some members of the Cambridge City Council, including City Councilors Leland Cheung G and Marjorie Decker are disappointed that MIT had to resort to layoffs.

City Councillors sharply criticize MIT

Cheung and Decker co-authored a resolution in an April 5 Council meeting “requesting that Harvard and MIT cease further layoffs and any cuts in hours, salary, or benefits.” The resolution suggested that MIT and Harvard use their billions of dollars in savings “to cushion employees and communities from any further financial harm” instead of laying off employees.”

Decker was not satisfied by MIT’s response. At the July 26 City Council University Relations hearing, the Cambridge Chronicle reported that Decker said, “What we said to you, to MIT, was ‘Don’t contribute to the destabilization of families in our community.’ And we got zero response.”

Decker said, “I will not be engaging in any conversations about other needs of the university until I have a better handle on what the university is doing to really, meaningfully, show that workers are a priority,” She said she would not support MIT for licensing and permit requests. Councillor Decker declined requests for comment this week.

Elizabeth Lint, the executive director of the Cambridge Licensing Commission, said that she had not received requests from Decker to deny licenses to MIT. The License Commission gives several different kinds of licenses including housing licenses to dormitories, fraternity houses, living facilities on campus as well as alcohol licenses to bars such as the Muddy Charles Pub within Walker Memorial. Lint said that it was “not usual or unusual” for a City Councillor to give their input on licenses.

Cheung, also an MBA student at the MIT Sloan School of Business, has been a vocal critic of the MIT layoffs as well. Cheung told The Tech in an interview, “I think the issue is that MIT has been a major recipient of the National Recovery Act, especially in support for research. And in a time when Massachusetts is pulling out of the recession and when MIT is getting extra support through the stimulus, it is inappropriate for MIT to start firing more workers.”

Cutting costs creatively

Cheung emphasized that there are “more creative” ways to lower the MIT budget. “The administration is still making a ton of money and new buildings are still being constructed,” said Cheung. “The way they are cutting is adversely affecting students.”

Alden disagrees. “People were very creative on campus to make the necessary budget cuts,” she said. “We laid off people only as a last resort.”

Alden said that medical employees voluntarily took rolling furloughs in order to prevent layoffs. In addition, all employees in the MIT Resource Development took a week of unpaid vacation.

MIT faculty and employees at MIT normally have small salary increases each year, but many workers asked for raise increases to be halted this year in response to the budget cuts. The MIT Human Resources responded to these requests by halting wage increases in 2010 for faculty making over $125,000 and for regular employees making over $75,000, according to Alden. “We made the necessary cuts in a very egalitarian way.”

Layoffs only made up of only a small fraction of the budget cuts at MIT. Layoffs only accounted for 10 to 15 percent of the savings. Employees who were laid off were not given the option to decrease their salaries in lieu of being cut.

As outlined by the Institute-wide Planning Task Force, of the $58.3 million reduced from the fiscal year 2010 budget, $11.3 milllion is from “compensation reduction”, $10.5 million is from cuts in academics, $12.9 million is from cuts in the administration, and $18.6 million is from cuts in renovation and renewal, utilities, the Committee for the Review of Space Planning (CRSP), and in other areas. To help those who were laid off, MIT held sessions for interview training, resume advising, and job search. Of the 104 people laid off during the first 12 months, 30 percent have been able to find jobs.

According to Janet Walzer, the Communications Director for the Human Resources Department, many of those laid off looked for jobs here at MIT. “A number of people that were laid off still wanted to stay, which shows how they feel about MIT.”

MIT was not the only institution to resort to layoffs. Alden pointed out that MIT laid off a lower percentage of its work force than many businesses and universities over the past two years. For example, many Harvard workers were either laid off or asked to take early retirement. According to Walzer, “the combination of layoffs and early retirement had an impact on many more Harvard employees than MIT.”

As a result of the economic crisis, the MIT endowment dropped by 17 percent during the fiscal year 2009. MIT will have to reduce its budget by as much as 15 percent over the next 2–3 years, according to Alden.

Even though MIT has stopped layoffs, Cheung said that he is not satisfied. “They haven’t done any more layoffs, but they haven’t recanted the layoffs that they did do.”