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The University of Southern California announced on Monday a series of cost-cutting measures to address the financial challenges driven by federal funding uncertainty.
The news comes as the Trump administration threatens to cancel federal contracts with private and public universities.
In a message to faculty and staff, university leaders outlined USC’s academic mission and steps aimed at protecting long-term financial sustainability. Measures include permanent budget cuts, procurement management, slowing capital expenditures and hiring for both teachers and staff restrictions.
“Although all members of the university have contributed to the substantial progress they have made to alleviate and reduce the structural deficit, recent developments require additional steps to increase financial resilience,” the message states.
USC, which received approximately $1.35 billion in federal funding in 2024, is giving back a lot of these funds, including $650 million for financial aid to students and $569 million in research. However, the future of such funding, and payments to the health system from Medicare, Medicaid, and MEDI-CAL, remain uncertain.
USC will also abolish the extended winter break that was first introduced in response to the Covid-19 pandemic. College staff were encouraged to plan their vacation times accordingly.
“We remain optimistic that these measures will not only allow us to survive the current storm, but also allow us to place the university on a stronger footing for many generations,” the statement read.
USC is not the only school that deals with funding uncertainty. Last week, the UC system also implemented employment freezes.
Still, the university’s leadership said it will continue to monitor the economic situation and development of federal funding, and will adjust its strategy as needed.
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