Dundee University is shedding more than than 600 jobs as the further education sector is braced for more cutbacks.

The university said the cuts were necessary to tackle a £35 million deficit and would entail “significant academic and professional restructuring”.

This will see eight academic Schools reduced to three Faculties, a reorganisation of research into a small number of focused research institutes, and a review of leadership, executive and governance arrangements.

Staffing will be cut in every school and directorate, amounting to 632 full-time equivalent posts – 197 academic roles, 119 school-based professional services posts in schools, and 316 directorate roles-based professional services roles.

It said the scale of the required staff reductions mean that compulsory redundancies cannot be ruled out.

Property, intellectual property assets and shares will also be offloaded as the board investigates the causes of its deficit and reshapes its operations to suit changes in the sector.

Professor Shane O’Neill, interim principal and vice-chancellor, said, “The current financial crisis has challenged us to ask some very fundamental questions about the size, shape, balance and structure of the University.

“The measures we are now proposing would make an essential contribution in our becoming a more appropriately balanced and restructured institution.

“Getting there will not be easy and we are determined to take on board all relevant lessons from the past and the various factors that contributed to the current position. 

“We are committed to an external investigation into what went wrong, which will be co-sponsored with the Scottish Funding Council, and we will accept and act on the findings of that investigation.”

The University announced last November that it was facing a financial crisis with an anticipated £30m deficit, brought about by a severe drop in international student recruitment, ongoing structural underfunding of higher education, cost increases, inflationary pressures and a range of other detrimental changes, including an increase in our National Insurance contribution.

Internal problems adding to the crisis included inadequate financial discipline and controls, poor capital planning and investment decisions, and weak compliance in financial control policies and lack of accountability.

Prof O’Neill added: “Savings in capital and operational expenditure have already delivered more than £17m of savings this year, some of them being recurrent savings. We will continue to exercise tight control on all expenditure. 

“There is an urgency for us to act promptly and we will continue to work intensively with the SFC and other stakeholders to ensure delivery of the sustainable and successful future we need for this great University, which is integral to the economic, social and cultural wellbeing of the city, our region and beyond.”

Scottish Conservative spokesman on energy and skills Miles Briggs said: “These are staggering and devastating job losses, but the University of Dundee is just the most extreme example of the crisis facing Scottish further education.

“Thanks to the SNP’s funding model and years of failure to support higher education, many of our universities now face alarming cuts and uncertain futures. Meanwhile, several colleges have announced that their survival is in doubt.”

Scottish Liberal Democrat education spokesperson Willie Rennie said: “There have clearly been some reckless decisions taken by the University of Dundee leadership, but this situation also reflects the underlying Scottish Government funding model.

“That’s why we need an urgent review of funding arrangements to prevent further crisis in Scotland’s universities.”

Dundee-based Scottish Labour MSP Michael Marra said “Dundonians will be in a state of shock at the prospect of significant job losses at the most important institution in our city.

“These are the consequences of a leadership that lost control of the university’s finances.

“While it is clear that profligate spending decisions at the University of Dundee have set the institution apart from the wider sector, a business model based on a 22% real-terms cut to Scottish student funding since 2013/14 has the potential to endanger the future of many of Scotland’s great universities.

“I urge the Scottish Government to take action so that no other city experiences what we are going through.”