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VP for Human Resources clarifies layoffs

Q: How many layoffs have there actually been which are a direct result of reengineering?

A: To date, the layoffs attributable to MIT's reengineering efforts have occurred within the Office of Lab Supplies. Of the 26 people issued lay-off notices, 15 were members of the Research, Development, and Technical Employees' Union, five were support staff, and six were administrative staff. All but four of these 26 employees have either found other jobs or retired.

Q: What was the major reason that MIT decided to close Lab Supplies?

A: The Lab Supplies people were doing a good job in terms of service and customer satisfacftion. However, a detailed review by the Supplier Consolidation team found that since Lab Supplies had to mark up their prices to make their operation self-supporting, they were not competitive in terms of price. Partnering with several outside companies which buy in huge quantity is expected to result in significant cost savings to the Institute.

Q: The rumor mill, and even Boston-area newspapers, make it sound like there have been hundreds of layoffs because of reengineering, and that service employees represented by unions have been especially hard hit. Why is there so much confusion about the numbers?

A: I think there are several reasons for the confusion. One is that our reengineering efforts have been going on at the same time that MIT has experienced cutbacks in federal funding. As a research university, MIT is dependent on the federal government to fund many of our research activities. When the government cuts back on research, or when a contract MIT hoped to win is awarded to another institution, layoffs are usually necessary and affect both administrative and service employees. But this is nothing new for MIT. For example, since 1992, there have been job losses at Lincoln Laboratory of approximately 320 positions. More than half of those were staff jobs. As you know, those reductions were not related to the reengineering effort.

Recently, a number of employees have received layoff notices at the Francis Bitter Magnet Lab and the Plasma Fusion Center. Layoffs at the Magnet Lab were caused when a grant from the National Science Foundation expired. Layoffs at Plasma Fusion occurred when the Department of Energy reduced funding for fusion research at MIT. In the final analysis, we know that layoffs, for whatever reason, are extremely difficult for employees and for their colleagues, but the community needs to understand that these were not the result of reengineering.

Q: You mentioned there are several reasons for the confusion. What are some of the others?

A: Well, in the fall of 1993 before the reengineering process had started, MIT announced that because of our deficit, we would need to reduce the number of on-campus jobs by about 400 over a three- to four-year period. Then the reengineering work got under way. The review by the Core Team indicated that as many as 650 positions might be eliminated as a result of simplifying major processes at MIT. Looking back, it probably would have been better not to have released those estimated numbers. However, since salaries represent the bulk of our operating budget, it's hard to talk about reducing the deficit without putting it into the context of fewer jobs.

My point is that we've talked about large numbers of jobs being eliminated, which hasn't happened yet. So when people in the community hear about layoffs, some of them assume the layoffs are a result of the reengineering process even though they are the result of federal cutbacks.

It's also important to remember that we're talking about positions to be eliminated, not just layoffs. People leave MIT for jobs at other companies, and a significant number of employees -- about 150 -- retire each year. The recently announced early retirement program will probably significantly increase the number of employees whoretire next year. Many of those positions will not be refilled.

Q: Employees seem to think that you or other senior officers are walking around with lists of names of the people who will be laid off. I know that isn't true, but can you talk about who will make those decisions and on what criteria they will be based?

A: Department heads will make those decisions and they will follow MIT's well-established procedures and policies. These include the Human Resources Principles and a document called "Procedures to be followed during Reorganization or Reductions in Work Force Resulting from Reengineering." Department heads are very familiar with these policies and both of them have been published several times in Tech Talk. [See the 12/14/94 issue of Tech Talk or the 5/1/95 Reengineering Special Edition.]

Q: People in the community are, understandably, nervous about layoffs, and also what MIT will be like after the dust has settled. Is there anything you can say to reassure them about the future?

A: MIT will continue to be one of the preeminent institutions of higher learning and research in the world. We should be able to compete well with other institutions for the best students and the most challenging research projects from both government and corporate sponsors.

It seems likely that employees will have more autonomy with greater decision-making opportunities. I believe that in the future there will be an increased emphasis on continuous learning and personal growth for employees at the Institute. Technology will play an ever-increasing role in our work lives.

Reducing the deficit is critical to ensuring all of our futures and to maintaining the long-term excellence of MIT. While there is no question that in the immediate future we will need to have fewer employees than at present, for the most part, the outlook for MIT employees remains bright. It is incumbent on all of us to work together to ensure that MIT will continue to be a good, challenging, and stable place to work.

A version of this article appeared in MIT Tech Talk on December 13, 1995.

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