In "Australian University Staff Job Losses Exceed Pandemic Financial Outcomes" (09 May 2022), Frank Larkins from University of Melbourne carries out an analysis of job shedding during COVID-19. He concludes that "... staff losses were greater than warranted based solely on 2020 financial results ...". Of course, universities may have been anticipating an uncertain future, and so making cuts in anticipation of further problems.
Not surprisingly, Larkins found that casual staff were most impacted, being the full time equivalent of two-thirds of cuts. However, if universities were making long term structural changes, reducing casual staff didn't make a lot of sense. Casuals have a low separation cost, not receiving the benefits permanent staff do. So if long term change to respond to an uncertain future, it would have made sense for universities to reduce permanent staff, particularly non-academic professional staff. The casual workforce could be retained in the knowledge it could be quickly reduced, if required.
The underlying cause of the changes might be the artificially high casual academic staff pool available. Universities have to compete with other industries for professional administrators, HR, computing, marketing and accounting staff. If offered a low pay casual job, potential employees could choose to not work at a university. However, in contrast academics have only a very limited range of non-university employers (some research organisations and government). Those wishing to be academics therefore have a choice between a low pay casual employment, or none at all. Universities were then able to discard casuals, knowing a pool would be available if need increased.
From an economic and human welfare point of view, having a large pool of underemployed academics is not good. The solution, for government, would be to end preferential subsiding of research doctoral degrees, to reduce the excess supply of PhD graduates.