Layoffs, Furloughs, and Budget Cuts Necessary at UK

LEXINGTON, Ky. — Following in the footsteps in other major universities in Kentucky and across the country, the University of Kentucky announces there will be budget cuts, furloughs, and layoffs coming to the school as a result of COVID-19.

University President Eli Capilouto addressed campus in an online letter Tuesday. He said senior administrators and deans met Monday, April 20 to discuss the details of the budget challenge.

Capilouto said the school is looking at a $70 million deficit. Declining income from UK’s investment accounts and tuition revenues account for $40 million. The other $30 million comes from ongoing commitments and increased costs the school says are essential to what it does: scholarships and aid for students, student mental health, the Disability Resource Center, and college incentive funds; health premiums for employees; and paying hourly workers $12.50 an hour. 

To try and deal with the deficit, Capilouto says there will be reductions in the school’s operating budget. He says every college, department, and unit, including the president’s office and those that report to him, will face cuts. He did say the cuts would not be across the board. He says the average cuts across the school would be 10%. 

Capilouto also listed steps he says the school will need to make: 

  • They will continue to have a hiring freeze
  • Workers not working or whose activity has been significantly decreased will be furloughed. UK will pay employee health benefits for 90 days. 
  • Layoffs will take place, but no specific areas were mentioned, only that human resources procedures would be followed. 
  • The school will reduce the University’s retirement contributions to individual employees from 10% of their salary or wages to five percent. The Board of Trustees will take up this proposal at a meeting in May. 
  • There will be no merit increases on July 1. 
  • UK is delaying the expansion of its family leave policy
  • It is delaying plans to make it mandatory for new employees to participate in the school’s retirement program. 

Capilouto acknowledged the steps are drastic and will cause “pain,” but says UK is like other schools across the country dealing with the same issues.