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The Stanford Graduate School of Business laid off 49 employees, or 12 percent of its staff, earlier this month because of a $15 million revenue shortfall, which is 10 percent of its annual budget.
In addition, eight staff members were put on a reduced work schedule and 12 contractor or “fixed-term” positions were eliminated. The school has reduced expenses for travel, food, library services, marketing activities and printing.
Student programs, including financial aid, were not affected.
“This was the most painful decision I have had to make in my nearly 10 years as dean,” Graduate School of Business Dean Robert L. Joss said. “We regret to lay off staff members who have been dedicated to the school and its educational mission, but by cutting expenses now we can ensure our long-term financial health. Every effort will be made to support employees as they transition out of our workforce.”
Laid off staff members received an enhanced university severance package, which was previously announced by the university. Stanford expects to cut its overall budget by 10 percent in 2009 and another 5 percent in 2010, reducing its $800 million annual general fund budget by $100 million.
— Don Kazak
By
— Don Kazak
By
— Don Kazak
By
Can’t they just tap into that zillion dollar endowment and avoid having to lay off staff?
“Can’t they just tap into that zillion dollar endowment and avoid having to lay off staff?”
Super, the answer is “no”. Eating one’s seed corn might appear attractive to the naive, like yourself, but adults have to make serious choices.
Wow, even Stanford is losing money and laying off people. I thought a Stanford job was relatively safe. The economy is really good. So good in fact the folks up in Sacramento and Palo Alto City Council think we all ought to fork over our milk money for higher taxes.
You might wonder whether or not they made a mistake with accepting the money for a glitzy new Business School building. It’s embarrassing to be building this structure now that people in business have failed the society so badly, and especially now that the School has to lay staff off.
The rich are right there when their names are going to go on buildings but not when it comes to preventing poor people from having to lose their jobs. Of course we know the rich are losing money too, but when you consider how much they gained at the expense of ordinary people in the last two decades… where they are as a result of falling back, even dramatically falling back, is not that terrible a place that they could not afford to do something that would make layoffs unnecessary.
But of course I’m missing something, and somebody will tell me, probably right here, what that something is, and of course I will be grateful.
Hey wondering,
I would prefer to think of the new building at the business school as an opportunity to reflect on what values people have and are being taught (both at home and at schools) that resulted in the catastrophe we are now all subject to.
Clearly, people need to be taught something different. Perhaps some of that new education can begin at a business school building created during Depression 2.0.
Good point, Greg C.
The endowment is down at least 30% – not as much to tap into there.
Actually, the payout from the endowment is smoothed so the full impact will not hit this year.
This is just the first of a series of announcements from Stanford.
The Athletic Department announced it was cutting back this week.
All schools and departments of the university have to turn in their
cutback plans by the end of March.
They should reconsider this:
Stanford drops tuition for some students
Steve Rubenstein, Chronicle Staff Writer
Wednesday, February 20, 2008
In addition, the university will waive room and board fees for students whose families earn less than $60,000 a year.
University President John Hennessy will make the announcement today on campus, university Provost John Etchemendy confirmed late Tuesday.
The university is making the change in the wake of published reports last month that its endowment had grown almost 22 percent last year, to $17.1 billion. That sum had begun to attract attention from lawmakers who want wealthy institutions to do more to reduce tuition costs.
Financial aid also will increase to families that make more than $100,000 a year.
“Thanks to our increasingly generous financial aid program … attending Stanford will cost less than most private and many public universities,” Etchemendy said.
Here’s the top of that last article:
(02-19) 23:49 PST Palo Alto — In a radical change to its financial aid program, Stanford University will announce today that it will no longer charge tuition to students whose families earn less than $100,000 a year.
It’s way past time for the business school to address its bloated bureaucracy. An institution that purports to teach business should not run so inefficiently. Many GSB alums can’t understand why departments that used to have 5 or 6 staffers now have three times as many people, even though the number of students hasn’t increased. There are departments that didn’t exist in our time, for example, a student activities group of about a dozen staffers whose job is to help students decide which extracurricular activities to pursue. Ten years ago, students managed just fine without that kind of handholding. You might even argue that today’s MBAs emerge less prepared than their predecessors because they’ve been so protected from “real world” issues and choices during their two years.
I don’t donate to the business school, and am not sorry that my hard-earned money won’t be spent on concrete for the new %50 million parking lot. I realize that the existing facility is tired and that the school has been losing students to schools with prettier campuses, but do they really need to replace that old building with seven state-of-the-art new buildings?
I do feel sorry for the people who lost jobs because most of them lack marketable skills and may not be able to find work elsewhere!
Great comments, Skeptic. They never could’ve tried that handholding with my generation of Stanford students, who also would not have tolerated the manicured physical campus (suggesting the regimented life is the only one).
Lots of scope for saving, and lots of questions about the drift into the current setup…
Endowments and gifts to universities are complex, and are often targeted gifts, with specific constraints on what the money must be used for, constraints designated by and with the donors. These gifts are also generally given and inspired by long term views and goals, which views and goals may often be at odds with short-term conditions. It is an intrinsic derivative of the difference between long-term and short-term thinking, not the result of some perceived indifference or thoughtlessness on the part those charged with implementing these plans and projects.
My hope would be that the students utilizing this new facility will focus their studies on the real causes of our current economic suffering, with a focus on re-discovering the fundamental economic elements required for a fully functional and equitable civilized society, as opposed to the dysfunction we are now witnessing both globally and locally.
In the long run, the silver lining of our current economic struggle will be the exposure of the the illusion of “Trickle-down”, Supply-side economic theory championed by one too many political parties over the past 40 years or so.
Isn’t the business school pretty new? Why do they need a new one? Stanford has so much money, it is sick. It was great when I went there 20 years ago, but they have spent so much improving it. Instead, they should just try to be frugal and give a good education at a decent price. School prices don’t need to increase so quickly without this waste!
I believe the current school building opened in 1966; until then the school had been housed in the quad. I would guess that the design was considered avant garde for that time. The two adjacent office buildings (no classrooms) are much newer and seem to be in pretty good shape. The current building has not been maintained, plus it’s dirty and smells. It does not compare well to the competition’s gorgeous facility. (You would think that people smart enough to get into a top MBA program wouldn’t make decisions based on the facility, but it seems that they do.)
I have seen the mockup of the new campus and there are sketches on the school’s website, Feels very elitist and country clubbish to me, but that seems to be Stanford’s general direction.
Once again, skeptic, I like what you say.
My brother-in-law has asked about the cost of keeping all these new structures going. Since the current building per your report has not been maintained and is dirty and smells, you would think potential donors would note that, and not want their building to end up the same way (and, incidentally, perhaps with someone else’s name on it)… What’s the real cost of these buildings and who is paying it?