When universities¡¯ chief operating officers were grilled about the state of the sector in a?recent survey?by the Nous Group consultancy, an Australian respondent warned of a downside to institutional leaders¡¯ lobbying efforts.

¡°We have created the ¡®boy who cried wolf¡¯ scenario,¡± the interviewee confided. ¡°We¡¯ve complained about every policy change, and now government and the public don¡¯t believe us when something is genuinely going to affect us.¡±

It is hard to convince anybody that universities are struggling when the available data suggest otherwise. Universities appear to be prospering, with their revenue at?record levels.

Of the 30 publicly funded Australian universities that had published their 2024 financial accounts when this article went to press, just 10 reported deficits, down from 20 the previous year. Collectively, the 30 institutions finished 2024 in the black by almost two-and-a-quarter billion dollars, after ending 2023 in the red by A$25 million (?12 million).

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The sector owes much of the improvement in its financial fortunes to income from foreign students, which increased by almost A$2.2 billion across the 30 universities. All but one university boosted their income from this source, with overall proceeds about 24 per cent higher even than in the pre-pandemic peak year of 2019.

This windfall reflected a post-Covid explosion in foreign students¡¯ numbers. Overseas enrolments in Australia surged to well over a million last year, with 499,000 of them in higher education, up from a pre-pandemic peak of 441,000.

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International education earned the country a?record A$51.5 billion, including A$16.9 billion funnelled directly to higher education institutions in the form of tuition fees. Wobbly visa application figures rebounded to a?monthly record in March, while earlier this year?research by Dutch analytics company?Studyportals?found that Australia had increased its market share of globetrotting students by 8 per cent.

Yet uncertainty about international education earnings is the major driver of a spate of restructures that looks likely to have claimed well over 2,500 jobs across some 14 institutions by the end of the year.

Four of those are in New South Wales (NSW), where Western Sydney University (WSU) and the University of Technology Sydney (UTS) have?each flagged up to 400 job cuts, while nearby Macquarie University proposes to remove the equivalent of?about 60 full-time positions, primarily from its arts faculty. The University of Wollongong is consulting on a plan to?scrap approximately 185 jobs, having jettisoned 92 over the summer.

Rolling restructures?at the Australian National University (ANU), meanwhile, are expected to claim about 638 jobs, with the National Tertiary Education Union (NTEU) branch estimating that staffing levels have already been reduced by the equivalent of 635 full-time positions since March 2024.

ANU management disputes this, saying 175 voluntary redundancies have been approved so far. Its latest proposal, announced on 5 June, is for a net reduction of 37 positions from its information technology, information security, planning and service performance areas.

ANU¡¯s neighbour, the University of Canberra, has also sought additional voluntary redundancies after cutting?about 150 jobs. In Queensland, Griffith has reduced its workforce by about 200, including 45 redundancies. The University of Southern Queensland (USQ) proposes to?cut roughly 150 jobs?after removing 109 last year. And James Cook University has reduced its staffing levels by a net 180 positions over the past three years, including 50 in 2024.

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Employee representatives question the rationale for all these cuts given the ¡°robust¡± financial circumstances revealed in the 2024 annual reports. ¡°ANU overestimated their 2024 deficit by A$60 million and will end up cutting far more than their original target if these changes proceed,¡± said Lachlan Clohesy, secretary of the NTEU¡¯s Australian Capital Territory division.

Andrea Lamont-Mills, president of the NTEU¡¯s USQ branch, is similarly sceptical about her institutional management¡¯s claims about the necessity of jobs cuts. ¡°While management claims a financial crisis is the reason for the cuts, their operating losses over the past two years have mainly been due to depreciation and amortisation,¡± she said. ¡°The university does face financial challenges, but no crisis that would justify the scale of the cuts proposed.¡±

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David Burchell, president of the NTEU¡¯s WSU branch, said that recently recruited vice-chancellor George Williams ¨C a legal scholar who was previously deputy vice-chancellor (transformation, planning and assurance) at UNSW Sydney ¨C was unaccustomed to operating on tight margins. Burchell said Williams had overestimated the precision of ¡°optimistic¡± in-house enrolment forecasts, and then ¡°panicked¡± when recruitment fell short of the ¡°rosy¡± predictions ¨C even when subsequent modelling showed that enrolments were stronger than in the previous three years, undermining Williams¡¯ prediction of a A$79 million deficit in 2026.

¡°I don¡¯t think he understands how close to the edge WSU runs it, every single year,¡± Burchell said.?

Williams maintained that ¡°a series of external market factors¡± necessitated a reduction of between 300 and 400 positions and said he was keeping the university community well informed. ¡°Change starts at the top,¡± he said. ¡°This began with my executive leadership team being reduced by 25 per cent. Starting next week, I will be hosting a series of campus visits to talk to our people.¡±

The union has been particularly critical of UTS, blaming ¡°a litany of serious management failures¡± for the ¡°overwhelming crisis¡± fuelling vice-chancellor Andrew Parfitt¡¯s proposal to cut 400 jobs. Critics say the university leadership increased its claimed ¡°deficit blowout¡± from A$45 million to A$100 million, while squandering about A$5 million on advice from professional services firm KPMG.

¡°This pattern of decision-making ¨C where executives sideline staff expertise, isolate decision-making and ignore internal warnings ¨C has led to serious consequences¡­across the sector,¡± said Vince Caughley, the NTEU¡¯s NSW secretary.

Parfitt said UTS had been trying to navigate its way back from a Covid-induced financial black hole and repay a A$300 million debt assumed in 2017, when ¡°the market was strong¡±, by planning a sequence of carefully managed deficits between 2020 and 2025, followed by a surplus in 2026. However, the university had been forced to revise upwards its savings target ¨C set at A$45 million in 2023 as inflation hit almost 8 per cent?¨C after the federal government imposed de facto caps on international enrolment. UTS¡¯ international revenue had already rebounded last year almost to pre-Covid levels, but the crackdown will leave the international share of UTS enrolments frozen at?roughly 25 per cent, rather than the 30 per cent intended, depriving the institution of some A$70 million in fees.

¡°It¡¯s not¡­decline that¡¯s the problem,¡± Parfitt said. ¡°It¡¯s the incapacity to grow at the rate that we needed.¡±?

Universities¡¯ annual reports show that the international education spoils have not been even. Revenue from overseas students has been growing most quickly at the ¡°big five¡± universities ¨C Melbourne, Monash, Queensland, Sydney and UNSW ¨C which collectively earned A$6.4 billion last year from foreign students¡¯ fees, compared with A$5.4 billion across the other 25 universities.

That is reflected in the broader financial picture. The average surplus at the big five last year was A$319 million; at the other 25 institutions, it was A$26 million. And of the five universities that have published their 2024 accounts and currently propose job cuts ¨C Macquarie, USQ, UTS, Western Sydney and Wollongong ¨C all posted deficits last year.

Nous principal Zac Ashkanasy said vigorous recruitment had been considered ¡°good practice¡± in? the past decade: ¡°It¡¯s taken all the universities a while to recalibrate the way they manage their finances and make decisions.¡±

He added that vice-chancellors had a ¡°complex¡± job handling the ¡°bullwhip effect¡± of Covid-19 ¨C the financial ¡°ripple effects¡± that were going to last for years. ¡°Universities made a series of best-informed decisions around resourcing during Covid and there has been¡­a lot of policy change and a lack of business certainty [since then],¡± he said. ¡°They¡¯re dealing with a set of quite complex issues outside their direct control, with incomplete information, doing the best they possibly can.¡±

Ashkanasy cited the international enrolment caps that the government intended to apply to each university ¡°one month before semester one¡± began in February: long after universities had ¡°locked in their cost base¡± (the proposal was ultimately defeated in parliament?but the government imposed de facto caps anyway by slowing down visa processing when application numbers neared?the proposed caps). Other bumps in the road were caused, Ashkanasy said, by rising wage costs and maintenance bills, increasing digital requirements, the need for estate renewal and urgent cyber ¡°mitigations¡± to avert ¡°disastrous¡± hacks capable of closing down entire campuses.

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Universities¡¯ finances have ¡°gone up and down¡­with the winds of change, but they are trying to establish long-term, sustainable financial footings so they can make investments into the future. Unfortunate as it is, they do need to make these short-term staffing cuts in areas of business where there has been a material change,¡± Ashkanasy said.

¡°They can hold some of their expenses, particularly on the academic side, slightly higher in the short term. But they will be looking at their long-term student profile¡­and demand for their courses. Sometimes universities need a trigger to¡­force some of the structural changes that they¡¯ve been looking at for a much longer period of time.¡±

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Unsurprisingly, the NTEU disagrees. the structural changes are primarily about shifting ¡°more workload onto fewer staff¡±, as vice-chancellors prioritise real estate, marketing and consultants ¡°over the people who make universities run¡± ¨C using the spectre of international enrolment caps as ¡°a convenient justification¡±.

¡°In many cases, individual staff members are being specifically targeted,¡± , president of the union¡¯s Macquarie branch. ¡°This raises concerns that these cuts are really about targeting individuals management dislike, not actual business needs.¡±

Western Sydney¡¯s Burchell said university leaders tended to copy each other in hard times. ¡°During Covid, the vice-chancellors thought, ¡®Here¡¯s an opportunity to put together every restructure we ever wanted to do but were scared to do because of the opposition. We can do it now because people are too worried about their jobs to resist.¡¯

¡°At the moment, vice-chancellors are talking up the international student numbers crisis to do further restructuring. When one does it, another follows, and another and another, because this is now the new normal. Universities¡¯ attitude is that if they don¡¯t, in a Darwinian sense, gear themselves up for the survival of the fittest race ¨C lean, mean, hungry ¨C they¡¯re going to get eaten up.¡±

But UTS¡¯ Parfitt rejected claims that the cuts are ¡°opportunistic¡± or motivated by personal animosities. ¡°This is driven by the need to save funding. I would have no appetite for this level of change that we¡¯re proposing if I wasn¡¯t forced to do it. It gives me no pleasure whatsoever,¡± he said.

¡°The leadership team [is] having pretty robust discussions around what we should¡­and shouldn¡¯t do, and testing it strategically. If a subject or course is not viable, one of the fundamental reasons¡­is because students are not choosing it.¡±

In Victoria, the cuts have generally been less dramatic than in New South Wales. Federation University has reduced its staff headcount by 87 ¨C including forced redundancies of 35 staff and the removal of 10 senior managers.?About?50 people accepted ¡°voluntary early retirement¡± at Swinburne University and the equivalent of between 28 and 55 full-time roles were made redundant at La Trobe University, according to the union.

Charles Darwin University has eliminated about 19 positions, although vice-chancellor Scott Bowman said some of the staff involved had been redeployed to other areas of the university. The University of Tasmania is consulting on its proposal to remove the equivalent of 13 full-time positions in humanities and social sciences.?

Similar cutbacks are apparent in private tertiary education, where employment declined by 800 staff last financial year as operating profits plunged by almost A$700 million, according to the??¨C though 800 only accounts for just over 1 per cent of the 77,400 people employed in the sector.

At least 140 education and training companies have entered external administration this financial year, up from 94 in 2023-24 and about 40 in 2021-22, according to the Australian Security and Investment Commission¡¯s?. The 2024-25 figures are likely to get ¡°far worse¡± after ¡°the government landed blow after blow on the industry¡±,? Monash University policy expert Andrew Norton.

But the NTEU says the cuts at universities are a consequence of broader governance problems. University executives are ¡°prioritising their own interests over the public institutions they are supposed to serve,¡± according to NSW secretary Vince Caughley.

¡°Management appear more focused on shielding themselves from scrutiny than ensuring the effective operation of the institutions they are meant to lead. Rather than fostering transparency and collaboration, university management is increasingly operating in ways that alienate staff and suppress dissent. Reports of bullying, intimidation and the erosion of proper decision-making processes are becoming more frequent.¡±

Caughley¡¯s Queensland counterpart, Michael McNally, says that the ¡°worrying thing in these restructures is always that management overestimate the number of positions they can do away with and end up hiring people back over the next couple of years¡±.

Not all those staff may want to come back, of course. Indeed, at Southern Queensland, NTEU branch president Lamont-Mills said the university¡¯s call for expressions of interest in voluntary redundancy had been ¡°seriously oversubscribed¡±, with up to 240 applications for a scheme that aimed to eliminate 150 full-time equivalent positions. Nevertheless, she fears that the university may still impose compulsory redundancies?if staff in the positions it wants to eliminate do not apply?to the voluntary scheme.?

¡°Some people have not had their expressions of interest accepted and¡­they¡¯re very unclear why,¡± Lamont-Mills said. ¡°They don¡¯t see themselves as essential for operational reasons. As per usual, there¡¯s no information from management.¡±

A USQ spokesman said staff had been ¡°regularly consulted¡± on the changes. ¡°Not all applications can be accepted as decisions are guided by operational needs and the proposed future structure.¡±

On the need for the cuts, he said that like many universities, Southern Queensland had experienced ¡°consecutive operating losses which are not sustainable¡±; its deficits over the past three years have totalled A$70 million, against annual revenues of less than A$400 million.

But instead of crying wolf about such figures, Victoria University vice-chancellor Adam Shoemaker said universities needed to band together with?government, unions and industry and all pull in the same direction, for the good of the nation.?¡°The problem is, everyone¡¯s having to work so much in isolation because the pressures have been on each individual university to make bail, as it were,¡± he said.

¡°We should be crying ¡®Collective!¡¯¡± he said. ¡°[I] really respect the union movement [but] we¡¯re always better if we can sit down and solve [problems] because if the place is going well, that [means] jobs for everyone. Each individual job can be more safe, secure and sustainable.¡±

john.ross@timeshighereducation.com

Recent reductions to Australian universities¡¯ workforces

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Source: individual universities (* - NTEU). Figures comprise proposed and completed job cuts since mid-2024, including redundancies and elimination of vacant positions, expressed in equivalent full-time terms (** - headcount)?