As part of an effort to restructure and downsize the central administrative operations of the University of California system, the University offered a Voluntary Separation Program to employees at the Office of the President in January 2008. The program was one of several initiatives launched by the management of the Office of the President to reduce the spending and workforce in the central administration while minimizing the need for involuntary layoffs. The program has successfully achieved substantial savings for the University.

However, I and a number of members of the Board of Regents are concerned about one outcome of the program: Employees who accepted a financial buyout to leave the Office of the President could be immediately re-employed elsewhere in the University with no impact on the amount of the buyout. I and the Regents recognize this may appear to the public as an objectionable use of resources even though the program is reducing our central administrative spending.

If this program is offered again in the future, I and the Regents believe it should be structured differently. The program was implemented prior to my administration, and members of the Board of Regents only were asked to approve one payout under the program -- not the program itself -- after being advised that an obligation to do so had already been established. I and the chairman of the Regents' Committee on Compensation agree that if the program is offered again, we will include provisions requiring repayment of a buyout on a pro rata basis for employees finding new work elsewhere within the University. I believe this action is important to ensuring the public's trust in our stewardship of resources.

We will fulfill our obligations to the employees who applied for and accepted a buyout under the terms we offered in the Voluntary Separation Program of earlier this year. These individuals are in no way at fault for agreeing to an offer we made them, and their integrity should not be impugned for doing so.

A total of 155 Office of the President employees accepted a buyout under the Voluntary Separation Program, which required them to leave the Office of the President no later than June 2008. Of these, 16 found new positions elsewhere within the University of California system. On an ongoing basis after the first year, we estimate that the Voluntary Separation Program alone will save at least $5 million per year in spending at the Office of the President. In total, the various efforts to restructure and downsize the Office of the President have now achieved more than $30 million in administrative savings.