University of Melbourne cuts 450 jobs due to projected losses of $1bn over three years

The University of Melbourne has announced it will cut at least 450 jobs from its academic and professional workforce due to projected losses of $1bn over three years.

In an all-staff email on Wednesday, seen by Guardian Australia, the vice-chancellor, Duncan Maskell, said the leadership had made “extremely difficult decisions” driven by reduced student enrolment, reduced research income and commercial revenue.

The announcement is the latest in a series of job cuts triggered by an estimated $16bn loss of revenue in the sector due to Covid-19, and follows the loss of 493 jobs at the University of New South Wales, 277 at Monash University and up to 210 at the University of New England.

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Maskell explained the university predicted revenue losses of “around $310m in 2020, $385m in 2021, and at the very least $230m in 2022” with further losses expected in subsequent years.

Maskell said the university had already made savings by “deferring capital expenditure, using available financial reserves, increasing our borrowing, tightly managing staff appointments, making savings in every faculty and division, and by executives taking pay cuts and forgoing pay increases”.

The university will draw down $350m from reserves and borrow up to $600m, but still needs to find $260m of ongoing savings against 2021 forward estimates, some of which will be in staffing costs.

“As a direct result of this dire financial outlook we have identified the need to reduce the size of our existing workforce in response to our changed circumstances,” he said, explaining job losses would be “approximately 450 continuing positions across the university”.

In a statement, the university confirmed there would be a further impact on casual and fixed-term roles.

“The global pandemic has meant many thousands of international students have not been able to join the university this year as a result of the border closures and the impact of this will continue to be felt for years to come,” Maskell told Guardian Australia.

“With fewer students, the university must be smaller and we will need fewer staff.”

Maskell told staff the university would do “everything we can to minimise involuntary redundancies” and consult with the National Tertiary Education Union from mid-September after it had developed a “detailed change plan”.

“Following formal consultation with staff and the NTEU we expect that towards the end of this year we will be parting with talented friends and colleagues who have devoted great time and energy to working at the university,” he said.

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“My goal now is to reshape and reset the university’s operations so that it is well placed to continue its high-quality education and research into the future.”

The shadow education minister, Tanya Plibersek, said the announcement marked “another terrible day for uni workers and their families”.

“Thousands of uni jobs have now been lost. Scott Morrison could have prevented the worst of these job losses, but instead he chose to do nothing.”

Although the government has guaranteed its $18bn contribution to universities, it has effectively excluded them from wage subsidies, contributing to big job cuts across the sector, with headline figures of cuts to continuing positions obscuring that many thousands more will lose fixed-term or casual employment.

In late July, Universities Australia told the Senate Covid-19 inquiry the sector is well on its way to an estimated 21,000 job cuts in the first six months of the pandemic.