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USC orders cuts and hiring freezes in face of federal scrutiny, budget problems

A feminine presenting person with light skin tone and blond hair in a knot wearing a white shirt and denim shorts with a blue mask pulled down and resting on her chin walks by holding a Trader Joe's bag next to a concrete sign inscribed with lettering that reads "USC University of Southern California."
A woman walks past a sign at the University of Southern California (USC) in Los Angeles, California on August 25, 2020.
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Frederic J. Brown
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AFP via Getty Images
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Topline:

USC has ordered immediate cost cutting, including a hiring freeze, fewer new faculty and the elimination of an extended, paid winter break.

Why now: USC says recent federal funding threats, cuts, higher costs and other problems led to the cost cutting. The federal threat is real: in fiscal year 2024, USC received about $1.35 billion in federal funding. But some of the problems are coming from inside the house. USC fundraising has dropped in recent years, while a major sexual assault scandal ended up costing the university more than $1 billion in payouts.

What else is getting cut at USC: No merit pool raises for most employees this fiscal year; an evaluation of capital projects to pause or stop them; and limits on non-essential business travel, conferences and entertainment. Here's the full message.

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Why it matters: USC employs tens of thousands of full- and part-time faculty and staff, and is a major academic, research and economic force in Southern California and beyond. Its budget problems might make it more susceptible to federal pressure, as the U.S. Department of Education investigates the school over claims related to antisemitism.

What's next: It’ll be up to a new leader to solve USC’s money problems. The board of trustees is searching for a new president after Carol Folt said she would step down in July.

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