The University of Sunderland has decided to downsize after a period of rapid expansion in the early 1990s left it "extremely vulnerable", according to vice-chancellor Peter Fidler.
It is one of a handful of universities that have worked out a recovery plan to overcome the impact of declining student numbers. Professor Fidler said:
"The academic tradition is to be slow and ponderous, whereas I am seen as fleet-footed.
"I am having to adjust things very quickly because of the pace of change over the past two to three years. The city has had some major knocks and many of our staff have been personally affected by, for instance, the closure of the shipbuilding yards and the collapse of the mining industry. These have not been easy times for Sunderland, but the task now is to manage that process of change and identify our areas of strength," he said.
In carrying out his business review to reposition the university, Professor Fidler, in his second year at Sunderland's helm, took some knocks himself. In March, 146 members of lecturers' union Natfhe passed a motion of no confidence in him. The union is balloting on strike action in protest at job cuts.
Some staff did not accept Professor Fidler's decision to shrink the institution. They believed that opportunities for expanding into new markets had not been fully exploited. In all, 140 jobs will have to go, many through voluntary severance.
Professor Fidler's priority is to "reduce significantly" the university's cost base. The number of undergraduates will decrease over the next three to four years before it stabilises. Some subjects will disappear as the university seeks to establish clusters of activity to reflect robust student demand and employment opportunities and to enhance the research profile.
From this September, undergraduate programmes in philosophy, religious studies, modern languages, electrical engineering and geology will be withdrawn.
Instead, Sunderland will focus on clusters of disciplines including business, law, psychology, computing, education, care, health and sport, the environment, medically oriented sciences, the cultural and creative industries and leisure.
Sunderland's funding shortfall is largely a legacy of a period of accelerated growth when there was excess student demand.
"Our finances were stretched and with the falling-off of demand we are are now extremely vulnerable," Professor Fidler said.
Sunderland, a small city that was once the world's largest producer of ships, has some of the poorest postcodes in the country.
The new economy is battling to compensate for the decline of the old economy. The combined effects of student loans and fees have bitten particularly hard in a region that is averse to debt, according to Professor Fidler.
"People here live on what they earn," he said.
Sunderland competes with four other higher education institutions nearby. The balance Professor Fidler wants to achieve is between an institution striving to continue its core mission of widening participation without compromising its reputation for excellence.
"We must strengthen our core student demand and at the same time identify new areas of demand," he said. "That is a tall order, but it can be done."