Neeli Bendapudi, president of Pennsylvania State University. (AP Photo/Matt Rourke)
The initial results of Pennsylvania State University’s decision to offer buyouts to employees at its Commonwealth Campuses are in, and they amount to a substantial reduction in the university’s workforce.
With enrollment now closed for the University’s Voluntary Separation Incentive Program (VSIP), the university has announced that a total of 383 employees, or about 21% of those who were eligible, opted for the VSIP. That’s equivalent to about a 10% reduction in personnel overall. Roughly 77% of the employees who took the offer were staff.
The university said the dollar value of the salaries and fringe expenses associated with these 383 employees is $43 million. However, the final, actual savings will not be known until later in the year, depending on how many positions are backfilled.
About half of the staff opting for the VSIP will leave the university on June 28. The rest will have their departure dates deferred until later in the summer or fall, but no later than Dec. 31. Of the faculty who participated in the VSIP, about 76% are leaving June 28, with the remainder having various deferred separation dates based on critical university needs.
Introduced at the beginning of May as part of a plan to reduce a budget deficit that had soared to $49 million, the VSIP was a voluntary opportunity for eligible employees to take an early retirement from Penn State. In exchange for their voluntary departure from the university, employees received a lump sum payment equal to a year’s salary.
Employees that were eligible for the program included tenured or tenure-line faculty, academic administrators and staff who are full-time employees and not on fixed-term contracts. Also to be eligible, employees had to have been hired before April 1, 2023.
The program was offered to Penn State employees whose primary work assignment was at one of the following campus locations: Abington, Altoona, Beaver, Behrend, Berks, Brandywine, Dubois, Fayette, Great Valley, Greater Allegheny, Harrisburg, Hazleton, Lehigh Valley, Mont Alto, New Kensington, Schuylkill, Scranton, Shenango, Wilkes-Barre, and York.
The budget hole faced by the Commonwealth Campuses was due largely to an overall enrollment decline of about 24% over the last 10 years. All but two of the branch campuses saw losses of between 16% and 50% over that period.
“Penn State has been making adjustments to address the reality of changing demographics in Pennsylvania and across the country, but these small changes are not enough to position the University for the long term," said Margo DelliCarpini, vice president for Commonwealth Campuses and executive chancellor, in a news release. “We have to make fundamental changes that create the most efficient organization possible in delivering on Penn State’s mission.”
Administrative Changes
In addition to the voluntary buyout, Penn State’s is also implementing a new regional administrative model intended to streamline leadership of the branch campuses. Effective July 1, the leadership of several campuses will be consolidated.
- In the west, Penn State Beaver and Penn State Shenango will be led by Chancellor Carey McDougall.
- In the southwest, Penn State Fayette, Penn State Greater Allegheny and Penn State New Kensington will be led by Chancellor Megan Nagel.
- In the northeast, Penn State Hazleton, Penn State Scranton and Penn State Wilkes-Barre will be led by Chancellor Elizabeth Wright.
- In the southeast, Penn State Brandywine, Penn State Mont Alto and Penn State York will be led by Chancellor Marilyn Wells.
“Over time we will refine the campus leadership structure as needs evolve to support a streamlined and responsive educational experience for students across our campuses,” DelliCarpini said in the announcement. “It’s important to note that our campuses will maintain their individual identities. Each one has strengths, and our goal is to build on those and scale them across the commonwealth.”
In addition to the leadership consolidation, the transformation of the Commonwealth Camuses will be supported by a one-time $20 million fund transfer from Pennsylvania State University President Neeli Bendapudi.
“I believe in the role the Penn State Commonwealth Campuses play in the University’s commitment to Pennsylvania families and in each one of their local communities,” Bendapudi said. “With these funds, campus and University leadership will have more time to find opportunities for growth and areas for improved efficiency.”
The university indicted it “will continue to analyze key administrative functions across the Commonwealth Campuses to identify campus structure transformation opportunities.”
The new administrative structure positions Penn State for additional reorganization through a greater centralization of IT and various back-office services. The university also expects to develop additional recommendations for the academic mission of the campuses that are likely to lead to academic program changes.
