Layoffs: Stanford vs. Sacramento

Even the great Stanford University can’t avoid the rough economy.  According to a brief Associated Press blurb in *The San Francisco Chronicle*today, Stanford will lay off another 60 employees this coming year in addition to the 412 already over the past eight months, roughly since the financial crisis struck and investments sunk:

Officials say Stanford’s endowment, which funds a big portion of its budget, is expected to decline 30 percent to $12 billion this year.

AP says that layoffs have been spread across graduate schools, academic departments, and staff and administration, not to mention 72 research positions that will be cut and left unfilled now that their work has been completed.

Nobody likes layoffs.  In fact, when 15% budget cuts across all university departments hit last spring, students affiliated with Stanford’s community centers protested, including fasting, when community center personnel saw reduced salaries, benefits, and hours, and one staff member was laid off.  For more, see Jean Paul Blanchard’s May 29 article, “Students Fast to Protest Community Center Cuts.”

Despite employing hundreds of thousands fewer employees, Stanford’s tough decision to fire hundreds of employees stands in stark contrast to California state government in Sacramento.  When Sacramento needed to reduce state employee costs by 15% to help solve its disastrous budget, rather than reduce the state workforce by 15%, Governor Schwarzenegger ordered one… then two… now three furlough days a month.  On “Furlough Fridays,” state workers are required to take the day off without pay and government offices and services close down.  After three furlough days, the accompanying pay cut to state workers amounts to about 15%.

By laying off 15% of the workforce, Sacramento could make sure that remaining employees can work full hours and can receive full pay and benefits – not to mention not closing down offices on Fridays (aren’t DMV lines already bad enough?).  There’s a good chance it will also boost morale, considering employees aren’t expected to work as hard for reduced salaries and benefits, and ideally the slackers in the office who aren’t pulling their weight would be the ones to get the axe.

Besides, Stanford was also smart enough to eliminate research positions whose time was through.  The state can’t even do that – there are thousands of vacant positions still available in Sacramento that haven’t been cut, so when one state worker gets fired, he can move right over to another one.  How does that reduce waste?

On the other hand, one could argue that state workers would have a hard time handling the additional stress from the same workload and a reduced workforce.  But they already aren’t working three Fridays a month, and I’d argue much of that 15% reduction would be made up in improved efficiencies – I don’t know who would argue that California state government operates the best it can.

So let’s start a discussion: who’s got it right?  Layoffs or furloughs?  Stanford University, in the heart of innovation in Silicon Valley, or Sacramento, the home of our… functioning?… state government?