The latest student numbers were released this week, showing just under 20,000 students were enrolled at the university for this year, a decline of about 2% on the same time last year.
"With regard to the impact of the 2024 enrolment situation, I indicated to staff that we have the capacity to absorb most, if not all the additional funding shortfall centrally without imposing additional savings targets," acting vice-chancellor Prof Helen Nicholson said.
"Subject to our re-forecast confirming that the shortfall is within the expected $3m to $5m range, that is the approach we will take.
"It is worth noting that a shortfall of $3m to $5m is a shortfall in the range of 0.4% to 0.6% of university revenue.
"As I have said previously, the programme of change we embarked on last year — including restructures in a number of specific areas — will be ongoing in 2024."
The university has been plagued by financial issues over the past couple of years, and figures provided to the Otago Daily Times showed last year there were 115.6 fulltime equivalent (FTE) voluntary redundancies, for a headcount of 151 staff, and 41.8 FTE compulsory redundancies for a headcount of 65 staff.
Tertiary Education Union co-president Craig Marshall said this week’s news of lower-than-anticipated student numbers was "obviously a worry".
"We’re still waiting to see what the consequences of this will be.
"It’s clearly a concern.
"I think there will be discussions about the situation [among staff], but that is likely to be part of the continuum of discussion that has gone on over the past year or so.
"It’s not a new problem, but a worsening of a problem that already existed."
Last month, the university council received a report outlining its financial position.
The end of year figures for 2023 showed an operating deficit of $21.6 million — nearly twice the forecast from its university council approved budget at the end of 2022.
There was also extensive borrowing of $105m, up from $30m the year before, and no borrowing before that in living memory.
The University of Otago has a borrowing limit of $400m and an agreement with the Tertiary Education Commission not to go over $330m unless there is a crisis requiring it to.
The Tertiary Education Commission recently identified the university as being of "medium" financial risk in a briefing to the government.
