UCPH sacks employees and ends year on DKK 220m profit

The University of Copenhagen (UCPH) has done it before: First, sacked the employees and then finished the year on a profit that is several million kroner larger than expected.

This is also going to happen in 2018, where management had originally budgeted a DKK 138.7 million surplus. Now, however, the year looks like being more than 220 million in the black.

At the same time, employees have been made redundant several places at the university in the course of 2018:

Layoffs in several departments

The Department of Plant and Environmental Sciences was forced to divest itself of 13 academic and 4 technical staff corresponding to about 10 per cent of permanent staff.

The Danish Forest and Landscape College under the Department of Geosciences and Natural Resource Management, has dismissed nine (3 academics and 6 technical/administrative staff) out of a total of 90 employees. Nine were also fired on a recent round in 2017.

The Natural History Museum of Denmark has said goodbye to 17 employees. Here, 19 were dismissed in 2016.

The Niels Bohr Institute fired seven in the summer of 2017. And the Faculty of Humanities has just announced that it has to save DKK 25 million on payroll. It is currently unclear how many positions are to be lost. The Faculty of Humanities got rid of 86 jobs in the spring of 2016.

Employees wondering

The prospect of UCPH being in profit while sacking employees was criticised by the three staff representative members on the Board of the University at the last meeting on 6th December.

The [job cuts] are a problem in relation to recruitment. People notice it, and it’s something that we talk about in the research environment

Eske Willerslev, Professor at the Natural History Museum of Denmark and UCPH Board member

Anja C. Andersen, professor at the Niels Bohr Institute, says that she sees it as a problem that she doesn’t know what to tell her colleagues.

“We just had a round of layoffs, so it is really difficult to get people to understand that they are firing people here, even though UCPH is turning a profit. I can’t explain it to them,” she said at the meeting.

Layoffs attract attention

Eske Willerslev, professor at the Natural History Museum of Denmark (SNM), said that the lack of job security for academic staff at UCPH has started to have consequences.

“In other places around the world, professors almost have to have been stealing money to be fired. But at the Natural History Museum of Denmark we have an annual round of layoffs,” he said, adding:

“This is a problem in terms of recruitment. People notice it, and it’s something that we talk about in the research environment.”

Misses target every year

It is not the first time that UCPH management has missed the mark. In 2017 it budgeted with a profit of DKK 101 million, but the year ended on DKK 250 million.

In 2016 it expected a DKK 132 million loss. Instead it ended on a DKK 80 million profit. But management still pushed through with DKK 200 million of cuts.

Signe Møller Johansen, a University Board Member elected by the technical-administrative staff, asked at the Board meeting on 6th December where all the money has gone?

“I want more transparency in the financial statement. The money must be disappearing somewhere when we at the same time have so many layoffs. It is the same situation every year, so it cannot come as a surprise. We need to get the money at work out in the departments,” she said.

Impressed with accuracy

Carsten Krogh Gomard, external member of the University Board and former director of Netcompany, is impressed with how well management has hit the mark however.

The total revenues of UCPH are expected to be slightly less than DKK 8.9 billion in 2018, so a profit of DKK 220 million represents only a small part of revenue.

The university’s researchers have been able to get DKK 100 million extra in external funding from the research councils, from the EU and foundations.

Salary costs to technical/administrative staff have also been DKK 26 million below budget.

Decentralised finances leads to problems

University director Jesper Olesen said at the Board meeting that the challenge is that the various revenues to UCPH can move up and down simultaneously.

Education programme revenue is falling, while external funding from the research council, the EU and from private foundations is increasing.

At the same time, UCPH has decentralized finances where it is up to the managers of the individual research groups to get research funding for their projects and pay their employees.

“I have previously called UCPH a collection of owner-managed businesses,” he said and continued:

“Research groups are dying out all the time when their ideas are exhausted. And at the same time new ones are born. We will therefore see appointments and lay-offs locally at the same time, even though UCPH in total is turning a profit and has increasing revenues,” said Jesper Olesen.

He understands that it can be difficult to see why dismissals are happening at the same time as the university is in profit. But it is difficult to solve the problem using the current decentralised budget model.

Management is therefore working on making a new budget model to provide more latitude for strategically reallocating resources internally at the university.

The UCPH equity will stand at around DKK 2.48 billion at the end of 2018.