St. Thomas plans to furlough employees and temporarily cut salaries, among other cost-cutting measures in response to COVID-19, as preparations begin to hold classes both in-person and virtually during fall semester 2020, President Julie Sullivan said in an announcement Friday.

The pandemic has “negatively impacted our finances,” Sullivan wrote.

The university has an $8.1 million revenue shortfall primarily related to student refunds for room and board from spring semester. Additionally, Sullivan expects a $2.1 million loss this summer mostly from the cancellation of summer conferences, external events, fewer students living on campus, and the reduction of dining services and campus store sales.

The university estimates that losses through this upcoming academic year could range between $20 million to $60 million “depending on the severity and duration of the pandemic.”

Sullivan said the university must act to ensure financial stability.

“I do not take this lightly,” Sullivan wrote.

Employment at St. Thomas

No layoffs have been announced for St. Thomas employees, but Sullivan said they could happen.

“As we envision the future of the university, some units need to structure their operations differently now, which could result in layoffs and restructured positions. These decisions will be made within the unit and undertaken with care and deliberation,” Sullivan wrote.

Those employees whose work is most closely connected with the temporary reduction in summer operations will be furloughed for periods ranging between four and 15 weeks, but their pay will not be cut. During that furlough health and tuition-remission benefits will continue.

Financial planning

Staff, including administrators, and full-time faculty with salaries greater than $58,500 will experience a temporary pay cut of up to 10%. Employees making $100,000 or more will have their salaries temporarily cut by 10%.

For staff and administrators, these reductions will occur between May 15 and Dec. 31. For regular faculty, the pay cuts will run from Sept. 1 to April 15, 2021.

The current employer contributions to the retirement plan will be suspended May 15 through Dec. 31 for the 1,600 eligible faculty, staff and administrators.

Additional measures to reduce cost

Sullivan also said the university is taking other cost-cutting measures.

Faculty sabbaticals will be postponed for one academic year, and faculty research grants will be deferred.

Planned computer replacements will be deferred, and spending on internal events will be reduced.

The current plan for St. Thomas to transition to a new athletics conference will continue but at a slower pace.

Current building projects, such as the Iversen Center for Faith and the dorm buildings, will be completed. The university will continue to defer any future capital and building projects.

Fall operations

Beyond the financial steps, the university anticipates a “balance of in-person and virtual instruction” in the fall. Sullivan wrote that decisions will be guided by recommendations from the Minnesota Department of Health and the U.S. Centers for Disease Control.

“We do not yet know exactly what our next ‘new normal’ will look like,” Sullivan wrote. “We are planning now for multiple learning options to ensure our commitment to educating the whole person and providing personal attention for every student continues.”

Despite the global pandemic, Sullivan remained hopeful.

“This is a difficult moment for St. Thomas, but it is also a time to lean on our strengths, our creativity and each other to imagine and create a pathway to our St. Thomas future which is brighter than our past,” Sullivan wrote.

Abby Sliva, Carly Noble and Kat Barrett contributed to this report.