The University of Southern California is in the throes of its most aggressive cost-cutting drive in memory — a grinding period of financial austerity that has shaken the university’s moneyed reputation and raised doubts among faculty and staff about the school’s ability to sustain itself as a top-tier institution.
Aiming to eliminate a budget deficit that ballooned to more than $200 million, the private school has cut nearly 1,000 positions, or almost 4% of its workforce.
Faculty and staff said that the layoffs have been especially stressful because they have been ongoing for months, although the university said last week that they are nearly complete — and that as many as 200 of those who lost their jobs could find new positions at the school. Other cost-saving measures have included restrictions on discretionary spending, such as travel for conferences.
“There’s a sense of just fear and anxiety among all staff. Even those who are safe don’t know if this is just the first phase of many future cuts,” said Phil Turner, associate director of USC Housing, who spoke to The Times as an employee and not in an official capacity.
In a wide-ranging Oct. 29 interview, USC interim President Beong-Soo Kim explained how the university found itself in such dire financial straits, detailed the austerity measures and pushed back against the notion that school leadership didn’t communicate to staff and faculty about how its plan would unfold.
Kim, who took over for former President Carol Folt in July, described several “internal” and “external” factors that contributed to the deficit, among them the expenses associated with the COVID-19 pandemic, rising costs for athletics and the paying of major legal settlements.
The belt-tightening has come amid President Trump’s push to remake higher education in a manner reflecting his conservative political agenda. His efforts have included slashing billions of dollars in funding to universities nationwide.
In early October, the White House presented USC and eight other schools with an education compact promising priority access to research funding in exchange for following Trump’s vision. USC rejected the compact about two weeks later, and it is not yet clear how — or if — Trump will respond.
Still, in his interview with The Times, Kim, 52, sounded an upbeat note.
“We can’t predict the future,” he said, “but we’re feeling very optimistic that we’ve met the budget challenge that was facing us, and can now focus on moving forward.”
What USC says about its deficit
Kim had signaled in July that layoffs would be forthcoming, writing a letter to the university community that said USC’s expenses had “significantly outpaced” its revenue for several years, leading to a budget deficit that, during the final year of Folt’s tenure as president, mushroomed from $158 million to more than $200 million.
Notably, in explaining to The Times how the university found itself in such a large hole, Kim did not cite two projects that faculty and alumni have often lambasted as financial albatrosses: the Bloom Football Performance Center, which broke ground in November; and the Capital Campus in Washington, D.C., which opened in 2023 and included the purchase of a building for about $49 million.
“I feel like we are paying for the opulence of the last decade,” said Turner, who also serves as president of the USC Staff Assembly, which advocates for employees.
But Kim told The Times that the Bloom Football project would be “largely … supported through philanthropy” and that the campus in Washington would show a “positive operating margin after you calculate all the revenues we are generating against expenses.” He touted several programs and institutions with a presence at the Washington campus, including the USC Leonard D. Schaeffer Institute for Public Policy & Government Service and the Shoah Foundation.
USC interim President Beong-Soo Kim assumed the role in July.
(Gus Ruelas/SC Photo/Gus Ruelas)
In July, Kim described a new challenge: “Significant shifts in federal support” for USC’s research and other programs stemming from the Trump administration’s sweeping effort to cut billions of dollars in grants to universities across the country.
USC has also been girding for decreases in international student enrollment. The Trump administration has increased its scrutiny of student visas and enacted a travel ban that has prevented thousands from studying in the U.S. International students typically pay full freight, and as of the fall, USC had 11,959 of them — the largest population in California and one of the biggest in the U.S.
Kim said that for this academic year, enrollment of international undergraduate and graduate students is down 3% from a year earlier. “This was actually less than what we were anticipating,” he said. “That’s a real testament, I think, to USC’s brand across the globe.”
But, Kim said, “I don’t know what’s going to happen next year.”
The nine-digit deficit and avalanche of layoffs have come as USC has steadily raised tuition and fees to become one of the most expensive colleges in the U.S. The university projects the cost of attendance for the current academic year to be $99,139, inclusive of housing, though many students receive robust financial aid.
Asked whether the figure would increase, Kim said, “We haven’t made a decision about that.”
“Let me just say this: controlling the growth in tuition is definitely a focus of ours,” he added. “People focus on the sticker price, but the actual annual cost of attendance is less than half of that.”
Who’s to blame?
Historically, layoffs at USC have been rare. The 1990s, marked by a recession brought on by the collapse of the region’s aerospace industry, included two notable rounds of job cuts. In one wave, 58 people were laid off and 31 vacant positions eliminated to pare down a $15-million deficit. Three years later, at least 100 faculty members at the medical school took pay cuts and an undisclosed number were dismissed as part of a plan to address an $11-million deficit.
This time is different. Not only are the cuts deeper, but their scale and scope have shattered a sense at USC that it was immune to financial issues plaguing other schools. And they’ve come after years of being battered by other crises, among them the Varsity Blues admissions bribery cases and the scandals involving former medical school dean Carmen A. Puliafito and former university gynecologist George Tyndall.
USC is a “wealthy institution … and there’s a sense of confusion from faculty as to how it got this bad,” said Ryan Boyd, an associate professor of writing. “This is a university that should be well-capitalized.”
The jobs that have been eliminated include every student academic adviser in the Viterbi School of Engineering and many others in the same role at the Dornsife College of Letters, Arts and Sciences. Other cuts have included adjunct and clinical instructors.
Turner, who has worked at the university since 2009, said the “stringing along” of layoffs has sent morale plummeting, which “inevitably is going to trickle down to the students.”
But Kim said that “before we sent a single layoff notice,” he attended about 40 town hall-style events with faculty and staff to discuss the financial issues.
“We were able to compress a tremendous amount of action into a very, very short period of time,” he said. “That was another one of our goals, to not only just do this once, but to do it as quickly as possible, so it is not hanging over people any longer than is needed.”
Kim said that aside from “ordinary workforce adjustments that happen every year,” the university has no plans to send additional layoff notices.
Some people have blamed Folt, whose multimillion-dollar university-owned Santa Monica home was put up for sale in October. (She no longer lives at the property, which is listed for about $10 million.)
“I’m all for USC having … names on buildings and being world-renowned. But the financial hole that you leave when you don’t properly plan for an investment like a building — it’s the staff that are paying for those decisions,” said Turner, referring to the Washington acquisition, which Folt trumpeted in her 2025 State of the University address.
In a statement to The Times, Folt said that when she became president in 2019, the university faced a litany of issues, among them “a significant deficit, costly legal challenges, and significant gaps in financial aid.”
Folt said that under her leadership, the university took steps to address those and other issues and tackled an unexpected one — the pandemic — while focusing on “securing a sustainable financial future for USC.”
“Six years later, the results are clear,” said Folt, who touted many successes, among them the Capital Campus.
As for the more recent economic woes, “we also were close to closing the financial gap,” but “external pressures” — including inflation and higher insurance and health system costs — necessitated “even greater and faster adjustments,” she said.
Former USC President Carol Folt.
(Art Streiber)
Several people said they did not blame Kim, a former federal prosecutor and the son of Korean immigrants. He joined USC in 2020 as general counsel, helping the university navigate the Tyndall scandal, which resulted in $1.1 billion in settlement payments to the gynecologist’s former patients — the biggest sex abuse payout in the history of higher education.
Some USC stakeholders said they admire Kim’s willingness to engage in a dialogue about the budget.
“He’s met with Staff Assembly, including meeting with me,” Turner said. “And we’re grateful, because that’s something we didn’t see over the past six years.”
A steady stream of cuts
In addition to the layoffs, the university has sought savings via a hiring freeze, the sale of unused buildings and the discretionary spending cuts.
Those trims, which have included paring back budgets for catering, professional development and travel — and requiring more approvals for expenses — have surprised some people, because the savings would appear to be negligible in certain cases.
Sanjay Madhav, an associate professor of practice at the engineering school, said that when his department previously held daylong faculty meetings, $25 to $30 would be allotted for a light breakfast and lunch for each person, and there was not a “strict upper limit.” Now, under newly imposed rules, only $15 may be spent per person.
“At our last meeting, our boss bought the coffee,” he said.
In an interview, James Bullock, the dean of Dornsife College, said he understood that such cuts “are annoying.”
“But one of the things that we’ve talked about in my office and throughout the dean suite — and when I go out and talk to people — if you can save $10,000 10 times, that’s a job,” he said. “And we are prioritizing jobs.”
Madhav and others said they’re more concerned with the loss of student advisers, who typically meet one-on-one with undergraduates and postgraduates to help them chart their academic paths.
“In the short-term, sure, it saves money, but it doesn’t in the long run, and think about all the institutional knowledge that’s being lost — and also the impact on students,” said Madhav, who along with Boyd is involved in a union organizing effort for non-tenure track professors.
Bullock said that at Dornsife, a new “hub and spoke model” — to be introduced in December — gives students “more access to advisers than they had before.” Teams of “clustered advisers” will serve students, each of whom will still have a primary one.
Trump administration pressures
USC has found itself in a financial quagmire at an unsettled moment.
USC academics celebrated the university’s rejection of the Trump education compact at a rally on campus on Oct. 17.
(Genaro Molina/Los Angeles Times)
The university’s rejection of Trump’s education compact was cause for celebration at a campus rally on Oct. 17, though the participants were bracing for more Trump trouble.
“This is a longer war against higher education, and we need to be prepared for this,” associate history professor Aro Velmet said at the rally.
Turner cautioned that any attempt by Trump to deprive USC of funding should not be conflated with the economic pain brought on by a budget deficit.
“We walked into this hole all by ourselves, well before the election was even decided,” he said.
Kim argued that shoring up the university’s finances could put it on a better footing to deal with Trump.
“We wanted to be as prepared as we could be for what’s coming down the pike,” Kim said, “so that we don’t have to take our community through what they have experienced again.”
