University of Melbourne to cut 450 jobs, faces $1bn shortfall

The University of Melbourne will cut 450 jobs to deal with a projected budget shortfall of more than $1bn.

Melbourne University vice-chancellor Duncan Maskell. Picture: Mark Stewart

The University of Melbourne will cut 450 jobs to deal with a projected budget shortfall of more than $1bn over the next three years due to COVID-19 and the loss of international ­students.

Vice-chancellor Duncan Maskell said on Wednesday that the university’s current rate of expenditure was not sustainable. “We must reduce our costs to match our operational requirements,” he said.

Academic and professional jobs will be cut in the university’s permanent workforce, as well as an unspecified number of casual and fixed-term roles.

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Professor Maskell said the university had worked hard to reduce costs in the last six months and had drawn down on its reserves. “The decision to ­reduce the size of the university’s workforce has been a last-resort measure,” he said.

While the university hopes it can shed jobs through voluntary redundancies and early retirements, some forced redundancies are likely.

Professor Maskell said Melbourne’s six-week stage-four lockdown was only making the situation more difficult. “The yoyo effect of scaling up and then having to go back into a hard lockdown is a real challenge for any organisation,” he said.

The university is expecting a revenue hit of $310m this year, followed by a $385m drop next year as international student numbers fall further, and then a revenue decline of at least $230m in 2022, with more losses to follow in subsequent years. Coupled with $80m extra spending this year to support students through COVID-19 and shift the university to online education, the budget impact is more than $1bn from 2020 to 2022.

However because it is not clear when international students will be able to return to Australia and what future ­demand for international education will be, Professor Maskell warned the outlook could change.

The current estimates are based on the assumption that half the expected number of new international students will be able to commence courses in the first semester of next year.

“The global situation may change, but based on all of the information we have available and our current modelling, we know the financial challenge facing the university is significant,” he said.