May 26 (Bloomberg) -- Harvard University Executive Vice President Edward Forst, a former Goldman Sachs Group Inc. manager who joined the school in September to oversee finances at his alma mater, is leaving after less than a year on the job.

Forst will step down Aug. 1 to return to New York and resume working in the financial services industry, the Cambridge, Massachusetts-based university said in a statement posted on the school Web site today.

A 1982 graduate of Harvard College, Forst was hired to be the “principal ranking operating officer” at Harvard, serving as a senior adviser to President Drew Faust, and to forge closer ties among the university’s units, the school said in June. Like other schools, Harvard has been seeking cost cuts after its endowment, the world’s biggest academic fund at $36.9 billion on June 30, lost 22 percent as of Oct. 31.

“It has been a privilege to lead the University’s financial, administrative, and human resources teams during such an unprecedented time in the university’s history,” Forst said in the statement today. “I am very proud of all that has been accomplished by the talented colleagues I’ve worked with at Harvard.”

Harvard has begun offering staff early retirement, slowed hiring and frozen salaries since school officials said the value of its endowment will probably drop a third by the end of next month from the $36.9 billion reported last year. A group of Harvard College students met with Forst May 20 to urge the school to avoid firing low-income employees, said Karen Narefsky, a sophomore and a member of the Student Labor Action Movement.

‘He Lectured Us’

“He lectured us about the endowment and didn’t really address any of our concerns, which was frustrating,” Narefsky said today in a telephone interview. “It’s been unclear to a lot of students what his position is, which seems kind of superfluous, especially now that the university is having such budget problems.”

Forst didn’t return a call to his office seeking comment.

After some students said reducing late-night shuttle bus service might threaten their safety, Harvard College Dean Evelynn Hammonds said she would reconsider the budget measure. More cuts are likely for the Faculty of Arts and Sciences, which includes most teachers at the college. Faculty Dean Michael Smith has said his unit must slash about 19 percent from its budget during the next two years to make up a $220 million shortfall.

Forst has “played a central role in shaping Harvard’s response to the extraordinary upheaval in the financial markets this year,” Faust said in the statement. “I am grateful for what he has done to help us navigate a year of particular challenge and change.”

El-Erian Departure

Mohammed El-Erian, Chief Executive Officer of Pacific Investment Management Co. in Newport Beach, California, also quit the university after a short stay. El-Erian left Pimco to lead the Harvard Management Co., the manager of the school’s endowment, in February 2006 and resigned from Harvard in September 2007.

Forst will continue to advise the school on financial and capital planning matters, the statement said. He will also continue to serve on its Debt-Asset Management Committee and will join its Committee on University Resources.

Before coming to Harvard, Forst was a member of Goldman Sachs’s management committee and was global head of its investment management division. Faust said she will search “expeditiously” for a new executive vice president.

“I am very grateful for what Ed has done to shape the role of the executive vice president and to help Harvard chart a sound course through what has been an economically challenging time for our university, as for many others,” Faust said in the statement today.

Harvard officials didn’t respond immediately to requests for comment.

To contact the reporter on this story: John Lauerman in Boston at jlauerman@bloomberg.net.

Last Updated: May 26, 2009 18:20 EDT