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The University of Southern California will move forward with layoffs as part of a series of financial measures, addressing interim president Kim, who described the message sent to faculty and staff on Monday as a “repeated structural deficit.”
The announcement concluded fiscal year 2025, with an operating loss of over $200 million, up from $158 million in the previous year.
Kim attributed the shortfall to both internal and external pressures, including worsening structural imbalances between university costs and revenue, weak financial results in USC’s health system, reduced enrollment of international students, and sudden cuts in federal funds.
“The ultimate impact of these changes is difficult to predict,” Kim writes. He said similar financial pressures have affected fellow institutions, but emphasized that “we cannot rely on hope that federal support will return to historic levels.”
To address these challenges, the university will implement layoffs along with an additional austerity slate. These include selling unused property, integrating duplicate management functions, and adjusting compensation for university top-paid employees.
Other steps already in place include hiring jobs, reducing school and unit budgets, discretionary spending control, elimination of some third-party services, travel restrictions and an increase in zero-met wages for fiscal year 2026.
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Despite a strong year of fundraising, Kim said these actions were not sufficient to resolve the core financial imbalances. “Unbefore left, this repeated structural deficit erodes cash reserves, constrains future planning and capital needs, and is simply unsustainable,” he writes.
He also ruled out further pulling from university contributions, increased tuition fees or underwriting additional debt. This is an option described as an unfair burden for future generations of USC students.
While acknowledging the difficulties poses of layoffs, Kim framed the situation as an opportunity to refocus the university’s long-term mission. “Our goal is not just to cut costs, but to build a durable operating model that can drive USC’s ambitions into the future,” he said. “It’s time to take the powerful actions necessary to move forward and move on.”
USC’s leadership plans to meet with faculty and staff groups in the coming weeks, including the Academic Senate, Staff Congress, Finance Committee Committee and school-level leadership teams.
Kim said she welcomes the argument “as difficult as I know.” The website linked to the presentation includes a suggestion box for students, alumni, faculty and staff to suggest ideas on how to address university financial issues and is also used to share updates.
“I know this isn’t the news we wanted,” Kim concluded.
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