The University of Southern California (USC) is grappling with a significant budget deficit exceeding $200 million, prompting interim president Beong-Soo Kim to announce a series of layoffs and other austerity measures to address this fiscal crisis.
In a letter to faculty and staff, Kim outlined the university’s challenges, citing drastic shifts in federal support for research and various programs, a situation exacerbated by President Donald Trump’s administration’s aggressive attempts to reduce federal grants.
Additionally, USC is bracing for potential declines in international student enrollment, further complicating its financial landscape.
Despite recent efforts at cost-cutting, such as a hiring freeze implemented in March, these measures have proven insufficient.
By the end of the last fiscal year in June, USC’s deficit had escalated to over $200 million, a notable jump from the $158 million deficit recorded the previous year.
To rectify this financial situation, Kim indicated that the university would initiate layoffs, sell unused properties, and adjust compensation for its highest earners, among other steps.
Kim expressed confidence that these difficult actions would position USC to emerge stronger from this challenging period, stating, “By taking these tough actions now, I am absolutely confident that USC can and will emerge stronger, ready to continue transforming lives and benefiting our society for generations to come.”
As universities across the nation contend with similar financial pressures linked to President Trump’s overhaul of federal funding protocols, USC is not alone.
In March, the University of California revealed a systemwide hiring freeze and cuts in several areas following threats to slash research funding, and Stanford University disclosed a $140 million reduction in its general operating fund along with layoffs due to uncertainties surrounding federal support for educational institutions.
Boston University likewise announced layoffs affecting approximately 120 staff members as part of efforts to reduce its budget by 5%.
Kim remarked on the potential scale of funding losses, suggesting that a university of USC’s magnitude could face the loss of federally sponsored research funding exceeding $300 million annually.
In response to today’s unstable external environment, Kim emphasized USC’s commitment to advocate for research support and its academic mission, but he admitted, “we cannot rely on the hope that federal support will revert to historical levels.”
However, some USC employees harbor differing views regarding the sources of the university’s financial struggles.
In interviews, two staff members acknowledged the severity of potential federal funding cuts.
Still, they pinpointed costly projects as culprits that have adversely impacted the university’s finances, such as the Bloom Football Performance Center, additional security measures implemented after protests regarding Israel’s war in Gaza, and the launch of the university’s Capital Campus in Washington, D.C., in 2023.
Sanjay Madhav, an associate professor of practice at the USC Viterbi engineering school, described these and other expensive initiatives as part of a pattern of “poor decisions” made by USC leadership in recent years.
Madhav claimed, “The administration has made a lot of irresponsible financial decisions,” adding that it is the regular employees who ultimately endure the consequences.
In an inquiry regarding the criticism expressed by some staff members, USC’s spokeswoman maintained that all pertinent information had already been covered in Kim’s letter.
The interim president did not disclose the number of personnel that would be laid off or provide specific details about the impending cuts.
Acknowledging that USC’s situation isn’t unique, he still recognized the disappointment and pain brought about by the announcement.
Kim’s message came just days after reports surfaced detailing staffing reductions within USC’s athletics department, where six individuals were laid off and another six positions were eliminated, including executive senior associate athletic director Paul Perrier.
While it’s unclear if these athletics department cuts fall under the layoffs Kim referenced, inquiries regarding these reductions were again met with a referral to the interim president’s letter.
Amid the uncertainty surrounding potential job cuts, some workers have reported feeling demoralized.
Phil Turner, who has served at USC since 2009, noted that staff morale is at an all-time low, stating, “I think it is the worst it has ever been in the 16 years I’ve been here.”
Turner, who also serves as president of the USC Staff Assembly, emphasized the need for the university to adjust its course amid the prevailing climate of anxiety among employees.
Kim’s letter did invite feedback for the university’s financial resilience efforts, directing staff to a webpage for suggestions.
However, Madhav expressed skepticism about providing input without concrete details about the university’s plan.
He highlighted the importance of transparency for employees facing potential layoffs, stating, “If anyone is going to be laid off, they’d like to know with as much notice as possible, especially given how difficult the job market is now.”
image source from：latimes
