I know nothing about the details of this case, and it is possible that economic pressures are really driving this move. But what the University President says here is correct as a matter of general principle (and consistent with what I've written about tenure previously):
Dr. Wilson believes his actions will, in fact, help stave off further attacks on tenure by politicians and others. "Because tenure is such an unusual thing, people who don’t understand it already have suspicions about it," he said. "Then when they see stories of blatant abuses, like what I’m talking about, it really puts the whole tenure system under further risk."