The University of Southern California announced Monday a series of cost-cutting measures to address financial challenges driven by federal funding uncertainties.
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 steps aimed at safeguarding USC’s academic mission and long-term financial sustainability. The measures include permanent budget reductions, procurement controls, a slowdown in capital spending, and hiring restrictions for both faculty and staff.
“While every member of the university has contributed to the substantial progress we’ve made to mitigate and reduce our structural deficit, recent developments require us to take additional steps to increase our financial resilience,” the message stated.
USC, which received approximately $1.35 billion in federal funding in fiscal year 2024—including $650 million for student financial aid and $569 million for research—relies heavily on these funds. However, the future of such funding, as well as payments to its health system from Medicare, Medicaid, and Medi-Cal, remains uncertain.
USC will also retire its extended winter recess, initially introduced in response to the COVID-19 pandemic. University staff were advised to plan their vacation time accordingly.
“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,” the statement read.
USC isn’t the only school dealing with funding uncertainty. Last week, the UC system also implemented a hiring freeze.
Still, university leadership said it will continue to monitor economic conditions and federal funding developments, adjusting strategies as needed.
