CBS launches cost-cutting initiatives
Higher interest rates, higher prices in general and increasing operating costs force CBS to carry out significant cutbacks towards 2025 to balance finances. Unfortunately, this includes staff reductions.
“It is sad and very regrettable having to reduce the number of employees, but we have done everything we can to cut costs elsewhere,” says Nikolaj Malchow-Møller, CBS President.
The current cost-cuttings amounts to around DKK 55 million. Following discussions in the CBS Board of Directors, the General Consultation Committee and with management groups at CBS, Senior Management finds that these cost-cutting measures must be addressed through operating cost reductions of DKK 10 million, while the remaining DKK 45 million must be found in the salary budget, equivalent to 60-70 full-time equivalents (FTEs). The reductions will be distributed across departments and administrative units at CBS.
Every attempt is being made to implement the reductions through mitigating measures. Unfortunately, the possibility of dismissals cannot be eliminated. The process is expected to be carried out during autumn and finalised in October.
“It is essential for Senior Management that the process is orderly and transparent in close dialogue with collegiate bodies, employee representatives and management groups. We hope that a large part of the reductions can take place through natural turnover, senior schemes and voluntary severance agreements, but unfortunately, we cannot guarantee that mitigating measures are enough to make the necessary salary reductions”, says Nikolaj Malchow-Møller.
The reason for the cost-cutting initiatives is that the terms for CBS’ financial prioritisation have changed. The majority of CBS’ equity is tied up in property, and the current elevated interest rates make it far more expensive to take out loans in our buildings. For this reason, CBS cannot continue spending our equity to the extent we otherwise had planned. Simultaneously, the organisation’s expenses in 2022 and 2023 have increased far more than expected, while income has remained steady. This creates a need to relatively quickly redress the necessary balance between income and expenses.
The coming cutbacks will not affect this year’s student enrolment, and CBS will continue to focus on maintaining high-quality teaching and research.