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Penn State furloughs some employees with 50% pay, doesn’t rule out future layoffs

Old Main on Penn State's University Park campus. (Min Xian/WPSU)

Old Main on Penn State's University Park campus. (Min Xian/WPSU)

Facing major financial losses, Penn State has furloughed some employees, but will be paying them 50% starting May 4 through June.

In a message to the community, President Eric Barron said the university has projected losses of $100 million this year and is expecting another $160 million in losses in the education and general budget funds in the upcoming fiscal year.

Barron says the university is planning for reduced enrollment and reduced funding from the state.

“As a result of the impacts of COVID-19, some of our employees do not have work they can perform — through no fault of their own. Each employee is important to us, however, we face significant financial losses,” Barron said in the emailed message.

A spokeswoman confirmed employees are being furloughed. She said the move affects approximately 2,000 employees.

Barron said, “There are too many uncertainties at this time to make workforce projections after June 30, but we will continue to assess circumstances and provide updates regarding whether further steps are necessary.”

The furloughs include Teamsters Local Union No. 8 employees. The message said the university and the Teamsters have reached a tentative agreement, which they expect to finalize.

“We are planning to direct federal stimulus funds received by the University intended for institutional support, separate from student support, to help make this possible,” the message reads.

Furloughed employees will continue to get their benefits. The university believes most of the employees will qualify for unemployment.

Barron’s message says that further furloughs or layoffs are not planned until at least the end of June, when the fiscal year ends.

“However, we face many uncertainties,” Barron said, “and there may still be a need to impose measures like these in the future.”

The university plans to hold tuition at its current rate for the fall, pending approval from the board of trustees.

Penn State is getting $55 million from the federal Higher Education Emergency Relief Fund. Of that, half is expected to go to emergency relief grants to students.

“We hope, of course, to return to more normal on-campus operations by the fall, but no one can fully predict what will happen with the pandemic,” Barron said. “We have tried to provide some clarity on the current situation for you and we will continue to share updates with our community.”

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