AU anticipates budget shortfall and introduces cutbacks

Aarhus University is facing a significant downward adjustment of this year’s financial results. While the university’s finances are fundamentally robust enough to handle this challenge, corrective action is necessary. A partial hiring freeze is being introduced, effective immediately.

Aarhus University viewed from the university park

Price increases and the economic developments in the wake of Russia’s invasion of Ukraine will almost certainly lead to significant financial losses for the university in 2022. 

As staff have already been informed, the university has been hard hit by the explosive rise in electricity prices in Denmark, which are in part a consequence of the current war in Ukraine. AU’s electricity bill will be significantly higher than budgeted for this year. And electricity prices are expected to continue to climb.

In addition, the Russian invasion of Ukraine has caused turmoil on the financial markets, which will result in a significant negative return on the university’s financial items. On top of this, a number of faculties are seeing a decline in educational revenues. More students than usual have elected not to take their exams, and we have fewer students enrolled, including on our continuing and further education programmes.

University Director Arnold Boon wishes to stress that the university’s finances are fundamentally robust enough to handle these challenges, but that the expected budget shortfall will make a significant dent in our financial reserves.

“We’ve previously warned of dark clouds gathering. Now the storm is intensifying, with extra pressure from the skyrocketing electricity prices and falling educational revenues, on top of a bad year for our financial items. So now is the moment for us to make an extraordinary effort to bring down our costs – and this is a task we all need to contribute to,” Arnold Boon states.

Partial hiring freeze effective 1 September

The university’s financial situation was discussed at an extraordinary meeting of the Main Liaison Committee earlier this week, after which the senior management team decided to introduce a partial hiring freeze. The hiring freeze is effective immediately. Towards the end of the year, the senior management team will review the hiring freeze and decide whether an extension is necessary.

“We’ve introduced this partial hiring freeze because now is the time to take corrective action, and hopefully this will help avert a situation that could have more serious consequences. We need to bring the university’s budget in balance in 2023,” Arnold Boon explains.

The partial hiring freeze applies to all administrative and academic positions. However, there are exceptions, for example essential positions which must not remain unfilled out of consideration for the organisation, and, as a general rule, positions that are fully financed by external funders.

We have to cut costs – especially our electricity bill

Steps are already being taken to reduce the university’s electricity consumption, and this work will continue. At the same time, the option of postponing expensive items on the budget, such as construction and renovation projects and digitalisation projects, is being explored.

“On very short notice, all units at the university have starting working to figure out ways to save electricity. I have a lot of respect for this, and I know that the faculties are currently working very hard to identify the most effective measures. And we will all need to take a look at our habits and really think about our electricity consumption when we’re on campus. Every little bit helps when it comes to reducing our costs,” Arnold Boon stresses.