The University of Southern California announced an immediate hiring freeze for all staff positions, “with very few critical exceptions” in a letter to faculty and staff on Tuesday.
The letter, from USC’s president, Carol Folt, and provost, Andrew Guzman, said the hiring freeze was one of nine steps to cut the school’s operating budget amid deep uncertainty about federal funding – given sweeping cuts to scientific research, the reorganization of student loans, and an education department investigation accusing the university of failing to protect Jewish students during protests over Israel’s destruction of Gaza following the Hamas attacks on 7 October 2023.
“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 other measures include: permanent budget reductions for administrative units and schools, a review of procurement contracts, a review of capital projects “to determine which may be deferred or paused”, a curtailment of faculty hiring, new restriction on discretionary spending and expenses for travel and conferences, an effort to streamline operations, a halt on merit-based pay increases, and an end to extended winter recess introduced during the Covid-19 pandemic.
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”.
The newly announced budget cuts follow a university statement in November of last year that informed staff that “rising costs require … budgetary adjustments”. In 2024, that statement said: “USC’s audited financial statement shows a deficit of $158 million.”
“Over the past six years, our deficit has ranged from $586 million during legal cost repayments and COVID, to a modest positive level of $36 million in 2023,” USC administrators wrote in November.
“Similar deficits are being reported at many peer institutions due to rising costs that outpace revenues across all of higher education,” they added.
