John Swinney has said he is “deeply concerned” about the “extreme situation” facing the University of Dundee.
The institution announced on Tuesday it plans to cut 632 jobs as it bids to tackle a £35 million deficit.
The number accounts for around 20% of the university’s more than 3,000-strong workforce.
The cash-strapped university will also look at selling off intellectual property rights and parts of its estate as it looks to downsize.
It may have to approach the Scottish Government, the Scottish Funding Council or even banks to fund redundancy payments.
Speaking to the PA news agency on Wednesday, the First Minister said support will be made available to the university.
John Swinney expressed concerns about the University of Dundee’s decision to axe hundreds of jobs (Jane Barlow/PA)
“There are obviously a range of challenges within the higher education sector for a number of institutions, and institutions are managing those challenges, and every institution has to do so,” he said.
“The example in Dundee is a particularly extreme example and I’m deeply concerned about the details and the implications of the situation that is being faced at the University of Dundee.
“The Scottish Government is working closely with the Scottish Funding Council, the organisation that interacts with universities about their funding, and as the Finance Secretary set out in the Budget in February, there will be support available from the Scottish Government to help with the extreme situation that we face in the University of Dundee.”
The described the university as an “important institution” with a “formidable track record” in a range of areas, including life sciences.
He added: “So it’s important that we take all the steps that we can all take as a community, in particular the university leadership, to safeguard the future of the University of Dundee.”
Universities minister Graeme Dey has said any plea for more funding for the university would be “carefully considered”.
Universities minister Graeme Dey said any pleas for more funding for Dundee will be ‘carefully considered’ by the Government (Andrew Milligan/PA)
The leadership at the institution has pledged its support for an external investigation “into what went wrong”, with interim principal Professor Shane O’Neill committing to enacting its findings.
He said: “The current financial crisis has challenged us to ask some very fundamental questions about the size, shape, balance and structure of the university.
“The measures we are now proposing would make an essential contribution in our becoming a more appropriately balanced and restructured institution.
“Getting there will not be easy and we are determined to take on board all relevant lessons from the past and the various factors that contributed to the current position.
“We are committed to an external investigation into what went wrong, which will be co-sponsored with the Scottish Funding Council, and we will accept and act on the findings of that investigation.”
Cuts have already yielded £17 million in savings, Prof O’Neill said, but more will be required.
“The measures we are proposing would make an essential contribution in our becoming a more appropriately balanced and financially sustainable institution,” he added.
The University and College Union Scotland said the loss of jobs is a “hammer blow to hard-working and committed workers at the university”.
Jo Grady, the union’s general secretary, said staff are “being made to pay the price for egregious management failure”.