Johnson & Wales Cuts 91 Jobs — A Continued Financial Slide
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Johnson & Wales Cuts 91 Jobs — A Continued Financial Slide
“Today, I write to you with a heavy heart as we announce a reduction in workforce that will be implemented this week. Throughout Johnson & Wales University’s 111-year history, the institution has known incredible growth, success, and achievement while also facing many challenges, obstacles, and periods of instability,” wrote Runey. “In the next few days, we will notify 91 of our colleagues that their jobs will be eliminated as part of a restructuring and reorganization of key departments and programs and an overall reduction in workforce.”
Runey became the third chancellor in the University’s history on October 1, 2018, and has worked for the school since 1989.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTFurther, Runey wrote, “A structural imbalance between revenues and expenses has created a current operating deficit of $34 million. Budget deficits of smaller scale have been addressed in recent years by one-time cash reserve spends, mostly from the sale of real estate. This was always meant to be a temporary tool while we allowed investments in programs to create their expected returns. Without changes to the core way the university operates, the deficit could continue to grow, creating an operational imbalance that would be very difficult to reverse. Changes made now will mitigate the potential for a larger more severe impact in the future.”
She outlined in the letter how she saw the decline of Johnson & Wales' financial situation, writing, "From 2011 to 2021, the university experienced declines in enrollment despite investments in new programs and recruitment and several significant actions to counter the trends. Since FY2012, overall enrollment has decreased 54 percent from a high of 17,294 (2011) to more than 8,000 each year for the last four years (2021-2024). Every academic area has been affected by these declines, including flagship programs. While there is some indication that we are on the right track with enrollment, we do not believe we will return to levels of enrollment that supported a much larger organization and operating budget. Our current student population is more than 50 percent smaller than it was in 2011, but our operating staffing and budget has decreased at a slower pace. Therefore, the changes we are implementing now will serve as a rightsizing of operations that will put the university on a stronger path.
In 2023, GoLocal Reported on the University’s Financial Decline and How Top Executives Took Major Salaries
READ HIGHLIGHTS FROM GOLOCAL’S 2023 REPORT BELOW:
Johnson & Wales University was a high-flying, fast-growing higher education corporation in the early 2010s.
Headquartered in Providence, it exploded in revenue, the number of campuses, and its top executive officers took mega-salaries.
In more recent years, J&W has faced a mammoth decline.
Overall revenue fell from more than $529 million in 2014 to $344 million in 2021— an unheard-of 30% decline in seven years.
All the while, the leadership team took millions in salaries and other benefits.
In a three-year period 2019 to 2021, J&W lost $99,085,047, according to tax records. Some of the University's tax records and audits have only been made public in recent weeks.
J&W claims the economic decline was due to COVID. But those claims don't hold up.
“JWU like many colleges throughout the country had fiscal challenges due to the impact of COVID but we weathered the pandemic and have completed the current fiscal year with a surplus,” said Jennifer E. McGee, the Director of External Communications & Media Relations at Johnson & Wales University.
The financial decline began years before COVID hit America's shores in 2020, and the University received tens of millions of federal COVID-19 Paycheck Protection Program (PPP) funds.
The University, which was founded in 1914 by Gertrude I. Johnson and Mary T. Wales, two women dedicated to providing relevant and practical education, has dramatically transformed over a century and is transforming again.
There were big salaries for top executives.
Then-Chancellor, President and CEO John Bowen received a total compensation package in 2014 of $1.5 million. Vice-chancellor Thomas Dwyer received more than $1 million that year. Those salaries were above average for executive compensation for university leaders, according to a study by the Chronicle of Higher Education.
J&W's overall revenue jumped to $529,237,534.
While 2014 was the height of the revenue for the University, it was not close to the high point for the compensation paid to the top executives.
In 2018, Bowen’s compensation jumped to $5.3 million, and Dwyer's was nearly $3.1 million.