AUSTIN -- A day after elected officials claimed they had helped avert a planned layoff of thousands of employees at the University of Texas Medical Branch, the interim chancellor of the UT System said a "significant" portion of workers will lose their jobs.

The layoffs will come as a direct result of damage inflicted by Hurricane Ike, which cost the academic medical center in Galveston about $710 million in building damage, ruined equipment, revenue losses, cleanup and evacuation. Insurance will cover about $100 million, said Kenneth Shine, the interim chancellor and executive vice chancellor for health affairs, in a story in the Austin American-Statesman.

"We recognize there have to be significant reductions in force on the island," Shine said Wednesday. "It's a very challenging situation."

According to Shine, some of the 85 buildings on campus took on as much as 8 feet of water.