James Wright, president of Dartmouth College, said in a community letter today that Dartmouth would cut its budget up to 10 percent in the next two years and may reduce its staff to do so.

Dartmouth, like almost all colleges, has suffered significant losses in its endowment because of the declining financial markets. Investment income from the endowment, which was $3.8-billion at the end of 2007 and is down more than $200-million since then, makes up more than one-third of the college’s budget.

In the letter, Mr. Wright said that the college anticipated needing a 10-percent cut — or $40-million — over the next two fiscal years, and that employee compensation would need to be part of that reduction. “Attrition will be the preferred approach to this,” he wrote, “but it is not likely to be sufficient to meet our objectives.”

His announcement follows statements from Harvard University and many other colleges and universities that the financial crisis was forcing them to make tough choices about reducing expenses.

In another Dartmouth letter sent today, Barry P. Scherr, the provost, and Adam M. Keller, the executive vice president for finance and administration, wrote that they expected the college would have fewer employees in the coming years, but they were committed to supporting those affected through the transition.

They also announced a freeze on outside hiring of staff members and delays in certain projects, and they asked for student, staff, and faculty input on how to cut the budget. —Kathryn Masterson