USC “is no longer operating in a structural deficit,” President Beong-Soo Kim said in an interview with Annenberg Media Thursday, one day before an investiture ceremony marking his official installation as the school’s 13th president.
“If we want to advance our preeminence while also bending the cost curve of education, tuition and research — as we must — responsible stewardship requires us to make choices,” Kim told the crowd gathered for his speech Friday.
In May 2024, USC began attempting to rectify its structural deficit by laying off 85 Keck School of Medicine workers. Months later, USC issued its first statement calling its losses “structural.”
What followed were waves of layoffs, described later in July 2025 by Kim as “painful” but “necessary,” in an attempt to rectify the structural deficit.
Since May 2024, USC has laid off at least 1,198 people, according to compiled California Worker Adjustment and Retraining Notification letters. These are notices sent ahead of “mass layoff, plant closure, or relocation,” according to CA’s Employment Development Department.
The layoffs affected most schools, with Keck School of Medicine, the Viterbi School of Engineering, and the Dornsife College of Letters, Arts, and Sciences being hit especially hard.
An Annenberg Media analysis suggests that the USC administration laid off workers in departments not largely responsible for the deficit. Rather than making cutbacks in management — one of the main contributors in overwhelming costs — USC cut its core programs.
‘We can overcome major hurdles together.’
Starting in 2018, USC’s reported “management and general expenses” began increasing sharply, according to its yearly Form 990s. This expense category covers all operations that “relate to the organization’s overall operations and management,” rather than fundraising and the university’s primary tax-exempt mission, according to the IRS.
In other words, anything unrelated to education, health care or other student services should be reported in this category. The IRS lists examples such as administrative salaries, board meetings, legal services, accounting, investment management, general insurance, office management and other centralized services.
USC did not respond when asked what positions would fall underneath management and general expenses.
Most of the workers laid off by USC — professors, academic advisors, healthcare employees, etc. – because of the structural deficit would have fallen under “program services,” a separate expense category.
These forms show that the program-related deficit has decreased while management expenditures have increased, outpacing other expenditures. The last seven years of poor financial performance stem primarily from management costs.
Management and general expenses at USC more than tripled since 2018, according to the university’s tax forms that have been compiled by Annenberg Media. At the same time, total expenses haven’t even doubled.
The numbers cited by USC officials to back up the claim of a structural deficit are found in USC’s mandatory audited financial statements. The university’s operations — not its investments — have been bleeding money for years.
Ignoring the legal settlements incurred by USC, which are not persistent and thus not “structural,” this trend began right before Carol Folt became president in calendar year 2019. In fiscal year 2019, USC operated at a loss of nearly $400 million.
The deepest deficit recorded in 13 years worth of filings that Annenberg Media analyzed was $700 million in fiscal year 2022. This can be attributed to instruction costs rising by $2 billion as the university returned to normal operations following the COVID-19 pandemic.
However, the numbers included in the financial statements tell a limited story. The salaries and benefits across the entirety of USC’s operations are lumped together. The operating expenses are similarly summed up.
Thus, the cause of the deficit is difficult to narrow down using these oft-cited figures.
Howard Bunsis, an accounting professor from Eastern Michigan University, has audited over 100 colleges and universities in the past 25 years. He criticized USC’s practice soon after auditing the university in early 2025 for the local American Association of University Professors chapter.
“They don’t break things down very much,” Bunsis said in an April 2025 interview. “They’re one of the least transparent universities I’ve ever seen in terms of what they put in their audited statements.”
When asked about the growth of management last calendar year, USC wrote in a statement to Annenberg Media it had “decreased administrative unit headcount by more than 100 positions.” However, the administrative units are not management at large, and management has been one of the fastest growing staff groups at USC in recent years.
The Integrated Postsecondary Education Data System, a mandatory survey program conducted by the U.S. Department of Education, shows massive growth in management positions at USC.
According to this data, USC grew its management pool by more than 400 from 2018 to 2025. From 2012 to 2018, management grew at virtually the same rate as the rest of the university.
Annenberg Media asked USC why the university laid off program workers despite the rising deficit being caused by management expenses. USC directed Annenberg Media to two extensive statements from Kim from July and November 2025.
“I hope you will understand both the reality of our situation and the deep respect I have for every member of our Trojan Family,” one statement read. The other read, “We can overcome major hurdles together.”
Neither statement addressed the baggage caused by management.
Deficit questions
Over a year ago, Bunsis said the cuts being made were not explained as well as they should have been.
“They just say, ‘Oh, we have a deficit.’ Based on what? ‘We have a deficit.’ They don’t tell you,” Bunsis said. “They just say, ‘We’re going to take in less. Expenses are going up. We have to make cuts,’ and I just don’t think they need to be making core mission cuts at USC.”
In a March 2026 statement to Annenberg Media, USC CFO Erik Brink attributed the rise in management expenses on the 990s to USC’s health system — including Keck, Verdugo Hills Hospital and corporate management — filing separate tax forms beginning in 2022.
Brink also cited “inflation over six years and the acquisition of Arcadia Hospital” as a reason for ballooning management costs. Arcadia’s management and general expenses take up a smaller portion of its total expenses than the other two hospitals.
However, even ignoring the health system altogether, management expenses have still outpaced total growth.
Asked recently for clarity about the growth of management of general expenses, the university provided the following statement:
“The university is optimistic that the steps we have taken are strengthening USC’s financial foundation and positioning us to invest in our people and advance our academic mission.”
In the end, USC gave no justification that fully explained the disparities between management and those laid off.
‘You can’t ask for things back.’
Brenda Miller was part of the Trojan Family for almost three decades. She laid down roots at the school: pursuing her master’s and beginning her professional career at the university. Eventually, she hoped to retire in the area.
“I had rolled up a lot of my identity in the institution, obviously, as an employee, as an alum,” Miller said. “I really bought into the Trojan family.”
In August 2025, Miller, then a senior advancement writer at the Keck School of Medicine, was called in for a regularly scheduled meeting.
“I walked in and my manager was there along with the HR person, and my stomach just sank,” she said. “I knew then, like, ‘Oh, this is happening.’”
Her last day on the job was two months later, ending a 27-year career at USC.
Looking back, Miller had to ask: “Was it worth me investing all of this time in an institution that just saw me as a line item on a spreadsheet?”
Annenberg Media asked Miller how she would feel if the reasons provided by USC did not justify the layoff she faced.
“I would be disappointed. I’d be disappointed in how everything played out,” Miller said. “I mean, what are you gonna do? You can’t ask for things back.”
Edited by Katherine Contreras Hernandez and Scott Hills