The Richmond Register

Local News

May 1, 2009

Berea College cuts 39 positions

BEREA — Because of far-reaching effects of the current U.S. and global financial crisis, Berea College regrets to announce a reduction of 30 full-time positions (21 of which are currently vacant) and nine part-time positions (six of which are vacant at present) out of a college work force of 572 full-time employees.

While nearly every college and university in America has been negatively affected by the current financial downturn, the impact on Berea College is particularly significant. Unlike other schools that charge tuition, Berea operates without the benefit of any tuition revenue. Instead, Berea College relies on endowment earnings to fund 80 percent of its annual operating budget. Contributions from alumni and friends account for another 10 percent.

As a result, when financial markets go down, the college's income is especially adversely affected. Even though Berea College's endowment has out-performed the financial markets, the substantial decline in the market value of the college's endowment and the projected decrease in earnings have created significant financial challenges for the college.

To address those challenges and ensure Berea's institutional strength, the college has closely monitored financial market conditions throughout this academic year and, in turn, identified various areas for budget reductions, including personnel, particularly because employee salaries, wages and benefits comprise nearly 70 percent of expenses in the annual operating budget.

Earlier this year, the college implemented a hiring moratorium to ensure most vacant positions remained so. Although no personnel cuts were made immediately, the college anticipated that some reduction in force, as announced here, would be necessary for the 2009-10 budget year and in coming years as well.

Although the college's goal was to reduce positions by attrition, where that was not possible, Berea has implemented a number of measures to provide assistance to those whose positions have been eliminated. Each person affected by the reduction in force has been provided information outlining the broad range of assistance they are eligible to receive including benefits from the college's reduction in force policy, an additional one-time cash grant from a Transition Assistance Program, and re-employment assistance.

To address the long-term impact of this financial downtown on the college, planning processes are under way that will secure Berea's future in a resource-restricted world. The intention of these planning processes is to assure that there will continue to be a vibrant and effective Berea College for the future that is economically sustainable.

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