University of Texas mulls cutting 500 jobs via consolidation

AUSTIN, TX -- The University of Texas is mulling a plan that would cut about 500 jobs over the next four or five years by consolidating finance, personnel, information technology and purchasing functions currently scattered among various units.

The Austin-American Statesman reported Saturday that university officials said the plan would save money and increase efficiency. They said most job cuts could be attained through retirements, voluntary resignations and attrition.

Word of the plan came in a draft document given to the media by the Texas State Employees Union, which represents some university employees.

Titled "UT Shared Services Plan," it projects savings of up to $140 million after 10 years, with continuing savings of up to $40 million annually. It's part of a larger effort that officials say could generate as much as $490 million in 10 years by cutting costs or increasing revenues.

The Texas State Employees Union opposes the plan and has asked officials to get more input from workers before moving forward, the newspaper reported.

Kevin Hegarty, the university's vice president and chief financial officer, said he couldn't guarantee consolidation would not lead to some layoffs. He also said, however, that natural attrition of up to 275 employees annually in the affected offices likely reduces the need for layoffs as the plan is implemented over the next four or five years.

The projected savings takes into account the as much as $180 million over 10 years it would cost to purchase updated computer systems and to train employees to operate the consolidated functions.

The university has about 20,000 full-time and part-time employees, including staff and faculty members. No faculty job eliminations are called for in the plan.

The Texas State Employees Union questioned the involvement of Accenture LLP in the university's shared services plan since the state of Texas canceled an $899 million contract with the company in 2007, following problems in outsourcing call centers for programs like food stamps and Medicaid.

Hegarty said the university will pay Accenture millions for helping to plan the shared services project.

The school paid Accenture about $1 million for a plan released in January that said the University of Texas could generate as much as $490 million in 10 years by consolidating services. It also called for selling excess electrical power, charging students more for room and board, and undertaking other cost-cutting or revenue-enhancing measures.

Committees are looking into various recommendations, Hegarty said.

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