USC implements hiring freeze, more budget cuts amid Trump funding threats

LOS ANGELES - USC administrators on Monday announced a series of financial austerity measures, including a staff hiring freeze and restrictions on faculty hiring, amid deep uncertainty about federal government funding.

What we know:

In a letter to faculty and staff, USC administrators, including president Carol Folt and provost Andrew Guzman, announced the immediate hiring freeze for all staff positions effective immediately, "with very few critical exceptions."

According to the letter, the hiring freeze was one of nine steps to cut the school's operating budget as it faces uncertainty about federal funding. This comes after USC announced cuts to scientific research, the reorganization of student loans, and an ongoing investigation into the university's actions during protests over the Israel-Hamas war.

SUGGESTED: University of California system implements hiring freeze amid threats to budget

"Like other major research institutions, USC relies on significant amounts of federal funding to carry out our mission," the university administrators wrote. "In fiscal year 2024, for example, we received approximately $1.35 billion in federal funding, including roughly $650 million in student financial aid and $569 million for federally funded research. The health system also receives Medicare, Medicaid, and Medi-Cal payments – a significant portion of its revenues – and the futures of those funds are similarly uncertain."

The USC leaders noted that the university has already made cuts to reduce a structure deficit, but said more steps are needed "to increase our financial resilience in the face of exceptional financial uncertainty."

Those steps will include a staff hiring freeze, curtailment of faculty hiring, a thorough review of procurement contracts of $50,000 or more, a reassessment of capital projects to identify those that could be deferred or paused, restrictions on discretionary spending such as conferences and non- essential business travel, and an elimination of most merit increases for the 2024 performance cycle.

What they're saying:

"We understand the impact that these decisions have for our dedicated faculty and staff and want to assure you they were not made lightly. As things continue to evolve at the federal and local level, we will regularly assess how we are progressing and whether further actions or adjustments are needed," administrators wrote.

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"We remain optimistic that these measures will not only allow us to weather the current storm, but also place the university on a stronger footing for many generations to come. Our mission as a university has never been more urgently needed. Senior leaders across the university have been advocating in a variety of fora, including in Washington, D.C., and will continue to advocate on behalf of the vital work that each of you performs. We are grateful for your continued dedication as we navigate these uncertain times."

What we don't know:

It's unclear how long the hiring freeze will last. 

Local perspective:

USC's announcement comes less than a week after UC President Michael Drake announced that they will implement a systemwide hiring freeze to help the university manage costs and conserve funds. 

Drake said the hiring freeze is one of several steps the university is taking to financially protect itself.

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Other steps include directing every UC location, including the Office of the President, to prepare financial strategies and workforce management plans that address any potential shortfalls, and directing all UC locations to implement cost-saving measures, such as delaying maintenance and reducing business travel where possible. 

Big picture view:

Last week, Columbia University agreed to implement a host of policy changes, including overhauling its rules for protests and conducting an immediate review of its Middle Eastern studies department.

The changes, detailed in a letter sent by the university’s interim president, Katrina Armstrong, came one week after the Trump administration ordered the Ivy League school to enact those and other reforms or lose all federal funding, an ultimatum widely criticized in academia as an attack on academic freedom.

The policy changes were largely in line with demands made on the university by the Trump administration, which pulled $400 million in research grants and other federal funding, and had threatened to cut more, over the university’s handling of protests against Israel’s military campaign in Gaza.

The White House has labeled the protests antisemitic, a label rejected by those who participated in the student-led demonstrations.

Two weeks ago, USC was one of 60 schools notified by the Department of Education’s Office for Civil Rights of "potential enforcement actions if they do not fulfill their obligations under Title VI of the Civil Rights Act to protect Jewish students on campus".