USC Announces Layoffs to Address Budget Deficit

Categories: College University AthleticsCollege/University NewsEducation

Empty classrooms represent the financial struggles at USC due to budget cuts.

News Summary

The University of Southern California (USC) has revealed plans to initiate layoffs in response to a significant budget deficit exceeding $200 million. Interim President Beong-Soo Kim outlined the financial challenges in a message to faculty and staff, citing various factors contributing to the shortfall, including decreased international student enrollment and cuts in federal funding. USC is implementing additional austerity measures to restore financial stability while engaging with employees regarding their concerns about the impact of these layoffs.

Los Angeles — The University of Southern California (USC) has announced plans to implement layoffs as a critical measure to address a significant budget deficit of over $200 million. In a communication to faculty and staff on July 15, 2025, interim President Beong-Soo Kim detailed the university’s financial predicament, which has worsened from a $158 million deficit reported the previous year.

The budgetary shortfall is rooted in a combination of internal and external pressures, including poor financial performance from USC’s health system, a decline in international student enrollment, and anticipated cuts in federal funding. Kim indicated that the university could face an annual revenue loss of federally sponsored research funding that may exceed $300 million.

These financial challenges are not unique to USC; many peer institutions are grappling with similar issues amid the current economic landscape. In response, USC’s leadership is pursuing additional austerity measures designed to improve financial stability and prioritize the university’s long-term mission.

Measures to Address Financial Strain

To tackle these challenges, USC has planned several strategies, which include:

Selling unused properties.
Consolidating duplicative administrative functions.
Adjusting compensation for top earners within the institution.

Prior attempts to mitigate the fiscal deficit have included a variety of cost-cutting measures, such as a hiring freeze, budget cuts across schools and units, restrictions on discretionary spending, the elimination of select third-party services, travel limitations, and a halt to merit pay increases for the 2026 fiscal year. However, these measures have proven inadequate to fully address the financial gap.

Impact on Employees and Future Plans

While announcing the layoffs, Kim emphasized the necessity of the decision, portraying it as a painful but essential step towards ensuring USC’s long-term viability without unduly burdening future students. He highlighted that increasing tuition, drawing further from the endowment, or incurring additional debt would not be a fair solution.

In the weeks ahead, USC leadership plans to engage in discussions with various member groups, including the Academic Senate and the Staff Assembly, to address employee concerns and gather feedback. To facilitate communication, a dedicated website has been launched for stakeholders to submit suggestions and stay updated on the university’s financial status.

Employee morale has been cited as a significant concern, with many expressing anxiety about the forthcoming layoffs amid an uncertain job market. Recent layoffs within USC’s athletics department have only heightened speculation about the broader implications of the layoffs being implemented university-wide.

Looking Forward

Kim has reaffirmed his commitment to creating a sustainable operating model that not only addresses the current financial challenges but also positions USC for future competitiveness. The proactive measures being undertaken are intended to stabilize the institution during a tumultuous time, demonstrating the university’s commitment to its mission and vision amidst financial hardship.