Dive Brief:
- Johnson & Wales University plans to lay off 91 faculty and staff members — about 5% of its workforce — as it tries to rapidly evolve its operating model, officials said. The cuts will affect its two campuses in Providence, Rhode Island, and Charlotte, North Carolina.
- The private nonprofit faces an operating deficit of $34 million after more than a decade of enrollment declines. “We simply cannot afford to be the size that we once were, and we believe this reduction will allow us to close a financial deficit and to move forward with a balanced budget,” Chancellor Mim Runey said Monday in a community message.
- With its cash reserves almost depleted, the university is also delaying salary increases until later this year when officials can “evaluate what is possible,” Runey said.
Dive Insight:
To explain why Johnson & Wales is reducing its workforce, Runey pointed to a 54% decline in overall enrollment since fiscal 2012, with headcounts falling from a high of 17,294 to over 8,000 in recent years.
The chancellor attributed the shrinking student body to demographic declines, fewer international students and shifting public attitudes about higher education.
Staffing and budgets, meanwhile, have fallen at a slower pace than enrollment, Runey said, framing the layoffs as rightsizing the university’s operations.
“While there is some indication that we are on the right track with enrollment, we do not believe we will return to levels of enrollment that supported a much larger organization and operating budget,” she said.
The university has already downsized in the recent past. In 2021, Johnson & Wales shuttered its campuses in Florida and Colorado — both of which opened to expand the university during times of growth in the higher education market.
Along with reducing expenses, the sale of those former campus buildings added to university’s endowment and reserves. Those reserves, however, have been drained to plug recent budget gaps.
The university has also pared down the number of senior leaders by about half since 2012, Runey noted. Additionally, it has consolidated academic programs, closed others with low enrollment, reduced jobs through attrition and streamlined aspects of its operations.
At the same time, Johnson & Wales has invested in a wide array of new programs to try to attract students. Over the past decade, some of those new offerings have “yielded great results while others less so, and some were reduced or discontinued,” Runey said.
She also pointed to more recently launched health and wellness programs. Those come with start-up costs such as specialized facilities, faculty and marketing efforts.
“These new program investments, while showing great early outcomes, have not yet had time to yield returns that would significantly improve the operational budget,” Runey said.
That stands in contrast to more rapid enrollment growth other rounds of new programming brought the university in the past, when market conditions were better.
“Today we plan with the conservatism that the times demand,” the chancellor said.
