In May 1996 Chancellor William T. Snyder announced that budget restraints would require the layoff of 78 employees, effective June 30. The state appropriation for UT Knoxville was $1.4 million less than the previous year; the university was responsible for one-third of a 3 percent salary increase; and projected fixed costs had risen. The budget for 1996–97 was approximately $7 million more than projected revenues. Fifty-five of the laid-off employees were in the Division of Information/Infrastructure (now Office of Information Technology).
Acting Vice Chancellor José-Marie Griffiths explained to the Faculty Senate that central funds had been covering several millions of dollars of annual under recovery, and, with the subsidy withdrawn, a 40 percent budget reduction ($5 million of $13 million) was required. The lack of funds in academic units to serve as a source for recoveries required eliminating 40 regular staff and 15 term staff and not filling 15 vacant positions. She also indicated that a student technology fee would be proposed to the board of trustees at its December 1996 meeting. The help desk was eliminated, listserv functions were suspended, and CAFÉ accounts for the summer were not available. Graduate students needing statistical computing consulting were required to pay $60 per hour.