Reading halves Malaysia workforce after multimillion-pound losses

The University of Reading has drastically scaled back its Malaysia campus in a bid to turn it into a “sustainable operation”, after running up multimillion-pound losses on the project.

Vincenzo Raimo, pro vice-chancellor of global engagement at Reading, told Times Higher Education that the campus had halved its staff workforce, although in many cases this was achieved by not filling vacancies rather than redundancies, and would operate out of just one building on the EduCity complex from August, rather than two as previously.

The campus has closed its undergraduate pharmacy programme and two master’s courses.

“We have scaled back our original plans quite significantly,” Mr Raimo said.

EduCity is an education hub that houses branch campuses of several Western universities. Reading started teaching students in Malaysia in 2014 and moved to the EduCity site in 2015.

As part of the shake-up, Reading will become the first foreign university in Malaysia to offer an undergraduate law degree. It will also offer foundation and undergraduate degree programmes in business, real estate, finance, accounting, quantity surveying and psychology – subjects it deems are most in demand in the regional and local economy.

There were 684 students at the campus in the 2018-19 academic year and this is forecast to grow to 1,000 students over the next four years, which is roughly the capacity of the building.

The new strategy also includes plans to increase the number of student exchanges between the two campuses.

Mr Raimo said that the Malaysian government had a longstanding “moratorium on the expansion of law to private universities”, but lifted this ban for the University of Reading earlier this year.

Reading’s latest accounts, published last November, record a £27 million bill for setting up and operating the Malaysia campus, stretching back to 2011, which pushed institution as a whole into the red to the tune of £20 million.

A report from Reading’s chief financial officer in February 2017, seen by Times Higher Education, references the difficulty in receiving accreditation for “the crucial law degree (around which much of the initial business case was constructed)” as one of the key reasons for the loss.

Mr Raimo said his “optimistic” estimate was that the Malaysia outpost would break even in three to four years, while his “pessimistic” estimate was four to five years.

Minutes of the university’s council meeting in November 2017 state that the executive board recommended continuing with the campus “subject to significant conditions”, including capping the university’s total investment in the outpost.

Mr Raimo said that the restructuring puts the investment “well within that cap”.

“Without the changes clearly we would have exceeded the cap and we wouldn’t have had a sustainable longer term operation. I have no doubt about that,” he said.

He added that there were often assumptions that international branch campuses are “all about making lots of money that is going to be repatriated to the UK campus”, but such notions are “a mistake”.

“British universities that think they’re going to get success from transnational education over a short period are deluded and most successes in TNE take longer than the single term of any vice-chancellor,” he said.

ellie.bothwell@timeshighereducation.com