Campus news

Coronavirus response: Financial impacts of COVID-19

"The longer that normal operations are disrupted, the more dire the situation becomes," two Berkeley leaders write

Students walk under Sather Gate
Students walk under Sather Gate. (UC Berkeley photo by Elena Zhukova)

Chancellor Carol Christ and Executive Vice Chancellor and Provost Paul Alivisatos sent the following message to faculty and staff on Wednesday:

We are writing today to share the latest information regarding the campus budget, our principles for decision making, and our initial recommendations.

The budget challenges we face related to the COVID-19 pandemic are becoming increasingly apparent. The Regents, recognizing the magnitude of the public health crisis, have set aside what was an advanced plan for a cohort tuition increase. Similarly, the governor must cope with unprecedented new challenges; hence, he has told us to expect, at best, a flat budget from the state. Anticipated Summer Session and University Extension revenues are down; additionally, we face an uncertain enrollment picture for the fall, particularly in regard to out-of-state and international students. We also face immediate losses in revenue and anticipated revenue—from cancellation of housing and dining contracts, as well as the cessation of all public gatherings such as those of Cal Performances and intercollegiate athletics. In addition, some of our expenses (technology upgrades to support online teaching and remote working, for example) have increased sharply.

The longer that normal operations are disrupted, the more dire the situation becomes. Current estimates place the budget impact of all of this in excess of $100 million and growing.

Campus Priorities

From the beginning of this emergency, the campus has put its teaching and research missions and protecting the health and safety of our community at the fore. We also continue to actively address the concerns and interests of our students and their families.

Now we turn to you asking that we seek ways to pull together so that we can save jobs, with the same spirit of cooperation and ingenuity that we have used thus far in facing the pandemic.

We are considering a number of proactive, budget-conserving actions to protect jobs. We can implement some measures on our own as a campus; in other areas we must wait for guidance from the UC Office of the President as the decisions have system-wide implications. We will be writing in the coming days in more detail about steps we can take to address these challenges. In addition, we will consult with our faculty and staff experts to inform and assist us in making decisions that are the best possible socially and economically for our employees.

Campus-wide hiring freeze

Today we are instituting a campus-wide hiring freeze. We therefore ask that you do not initiate any new searches and suspend those that have already begun. The Office of People and Culture (formerly central human resources) is completing work on a hiring-freeze plan which will be shared with managers and supervisors shortly. The campus will be making very limited exceptions to the hiring freeze, making only select hires that protect against a significant business disruption and/or a significant health, safety, or ethical compliance risk. All academic hiring requests will be carefully reviewed by the Provost’s office.

We also ask that you carefully monitor expenses as we enter the last quarter of our fiscal year and hold off on any major expenditures until our budget picture becomes clearer. Please consult with your manager/supervisor or department/division head for guidance.

On a related note, our campus has been at the forefront of advocating for state and federal assistance and we will continue to push for these avenues of support, some of which will directly benefit our students.

We will continue to keep you updated as we move through this important financial modeling and analysis.

Concern for your well-being

We acknowledge that this is an incredibly stressful and trying time for everyone: those working to balance work and family, those facing health challenges and worried about the health of loved ones, those with financial hardship, and those for whom the uncertainty of our current reality is overwhelming. We are working in numerous ways to alleviate some of these burdens and invite you to make use of campus resources if needed. Please refer to the campus COVID-19 website for all other information; it is being continuously updated and has a form to submit questions.

Meantime, take good care and we will continue to share information as decisions are made.