The retirement incentive, which Cavanaugh said he expected to be offered to about 100 individuals, is another step toward helping reduce overall compensation expenses, which will limit the potential for involuntary layoffs later.

"I'd like to extend a compliment to the Duke community," Cavanaugh said. "This is an incredibly difficult time. These are hard processes to go through. These are hard decisions. I don't think there is a person on campus who is not working harder now than they were a year ago. I think we're all in this together, and we have to realize that and keep the esprit de corps where it is."

Before an audience of more than 200 faculty and staff in Reynolds Theater, and at least another 260 watching the online broadcast, administrators took questions and described work underway to reduce expenses and offset an expected decline in endowment income.

"In general, we are about as far as I thought we would be, but we still have a long way to go," Trask said.

Already this year, the university limited salary increases to one-time payments for individuals earning $50,000 or less, curtailed external hiring, significantly reduced overtime expenses, made significant reductions in the budgets of the individual schools, introduced an administrative reform effort and accepted nearly 300 individuals as part of the first retirement incentive, which was directed to hourly-paid (biweekly) staff who participate in Duke's pension plan. These efforts have reduced the workforce by about 350 positions and saved about $25 million.

Under the terms of the new monthly staff retirement incentive, deans and vice presidents will determine eligible positions based on whether the position could potentially be eliminated or restructured for significant cost savings if the retirement incentive is accepted.

Staff who work in positions eligible for the new retirement incentive and meet the following criteria will have the opportunity to enroll for enhanced retirement benefits:

• Must meet the Rule of 75 (Age + Years of Continuous Service = 75) by Dec. 31, 2009, which is the minimum eligibility for post-retirement health insurance benefits;
• Must be in a benefits-eligible position identified by a school or department as one that could potentially be eliminated or restructured;
• Must be in a position that is not funded more than 50 percent by grants or contracts.

Final details of the retirement incentive are being developed now and eligible employees will be notified within the next two weeks. Individuals who have been designated to participate in the program will then have at least 45 days to make their decisions. Information sessions will be held for eligible staff in October to explain the details of the retirement incentive and address any questions.

Milam, the vice president for finance and treasurer, reminded employees that despite the recent improvement in stock market indices, Duke still expects to see declines in income from the endowment and investments over the next two years. However, because the investment income available to the university is based on a three-year average, "what we are dealing with here is a moving target."

Lange said that despite the budget challenges, Duke's schools and academic units have been able to maintain their "quality and momentum and have begun some processes that will lead to significant innovation." In addition to several cost saving efforts underway in the schools, he said some areas were also looking to address the issue from the other side of the financial equation.

"The schools are also developing new programs that will enhance their revenues at the same time as they are bringing in innovative ideas," Lange said. "I'm pretty confident that we are moving ahead in the way that we want.

In the question and answer period, audience members focused many of their questions on the early retirement and the likelihood of further reductions in the workforce.

Trask noted that earlier in the year, a rough target of a reduction of 1,000 positions had been set, "but it is really a money target more than it is a people target. If the fill rate [of empty positions] is about 50 percent on a case by case basis, my guess is that we will be okay."

Slide outlines number of positions eliminated to date by Duke.

Cavanaugh reiterated that large-scale layoffs, such as those announced by universities such as Harvard, Yale, and UNC, "is a scenario we are working aggressively to avoid. That's the whole purpose of having these systematic processes of reducing the number of positions before we have to deploy anything like that."

Administrators stated their appreciation for the hard work of Duke employees, and sounded a note of cautious optimism that Duke is better positioned than many of its peers to ride out the downturn in the economy.

"The community has come together around these efforts, and we've gone through this first year and morale is in great shape," Lange said. "But we can't ask people to sustain that unless we are as transparent and clear about what we are trying to do as we can be."

To listen to the entire Primetime discussion, click here.

Below, Ben Kimmel, an IT analyst with Blackwell in the Office of Information Technology, asks a question during the Primetime forum Thursday. Photos by Megan Morr.