Harvard feels the economic pinch; axes jobs

07 February 2009

The global economic slide has taken its toll on Harvard University, the wealthiest in the US, as it will cut 25 per cent jobs in Harvard Management Company, its internal firm that handles its massive $28.7 billion endowment fund, after losing $8 billion from the $36.9 billion portfolio at the end of October.

The management company, which has 200 employees on its rolls, will see its staff strength reduced by 50 over the next few months as most of the university's endowment, which is invested in hedge funds, private equity funds, commodities and real estate, has lost nearly 22 per cent in the four months ended 31 October. (See: Harvard endowment takes a loss $8 billion)

HMC said that the job cuts will take place across the company, where investment executives, support staff and other back office personnel will be reduced.

HMC chief executive Jane Mendillo wrote in a statement that the management had made an analysis to restructure the company in wake of the current economic crisis and said that ''the time was right for a significant rebalancing of our staff and our functions.''

''This type of thinking and rebalancing is done, and should be done, continuously, in organisations that are and that want to stay at the top of their field, through all kinds of market cycles and economic conditions,'' she wrote.

Harvard's president, Drew Faust, wrote in an e-mail in November to faculty, staff, and students saying, "We must recognise that Harvard is not invulnerable to the seismic financial shocks in the larger world." (See: Harvard University to tighten belt as kitty shrinks)