USC announced major budget cuts and hiring freezes Monday, citing federal funding uncertainty and increased costs. The university announced the financial cutbacks in an email, which include a hiring freeze to nearly all staff positions, “significantly restricted” faculty hiring, an end to extended staff winter break and a pause on merit raises. The cuts also include permanent budget reductions for “administrative units.”
“As you are aware, colleges and universities across the nation are facing tremendous scrutiny and financial stress due to federal funding uncertainty, cuts, increased costs, and other risks. Like other major research institutions, USC relies on significant amounts of federal funding to carry out our mission,” the statement read.
The email also announced a capital spending slowdown, an intensive review of all procurement contracts over $50,000 and new limits on discretionary spending. In a vague section titled “Enhanced Efficiency,” the university stated “all administrative units and schools will be directed to identify ways to further streamline workflows, services, and operations to meet new budgetary targets.”
This comes after S&P Global Ratings revised USC’s outstanding revenue debt rating from “stable” to “negative” because USC’s operating margins will likely be negative through the 2025 fiscal year, according to their report from March 19.
These budget cuts come in addition to a slew of staff and mandated department budget cuts throughout this school year. In October the university announced they would stop their graduate studies support for dependent children of faculty and staff via USC’s Tuition Assistance Benefits and reduce other employee tuition discounts. Other cuts have included reducing the Daily Trojan’s budget and the number of Trustee and Presidential merit scholarships.
The statement concluded with an acknowledgment that these policies will be continually assessed as “things evolve at the federal and local level.”
Earlier this month, the federal government canceled $400 million in federal grants and contracts for Columbia University. According to a press release published jointly by the Departments of Education, Health and Human Services, Education and the U.S. General Services Administration, the decision was made “due to the school’s continued inaction in the face of persistent harassment of Jewish students.” USC, which had protests similar in scope to Columbia’s, is being investigated by the federal Task Force to Combat Antisemtism and risks losing funding as a potential “enforcement action.”
This funding uncertainty is likely impacted by President Donald Trump signing an executive order on Thursday aiming to close the Department of Education (DOE). The DOE managed the federal student aid program, through which USC received roughly $650 million during the 2024 fiscal year, according to the university’s email.