USC Grapples with $200 Million Operating Deficit, Announces Layoffs
LOS ANGELES, CA — July 15, 2025 The University of Southern California is confronting a steep financial shortfall of over $200 million in its operating budget for fiscal year 2025, prompting the administration to announce layoffs and other cost-cutting measures. Interim President Beong-Soo Kim acknowledged that this deficit—up from $158 million the previous year—reflects a “structural” issue, exacerbated by poor performance in the university’s health system and declining international student enrollment.
Compounding the issue is the potential loss of up to $300 million in federally sponsored research funding, further tightening USC’s financial outlook. The university plans to address the shortfall by implementing layoffs, a hiring freeze, consolidating overlapping functions, and selling off underutilized properties. Adjustments to high-level compensation packages are also on the table.
These steps build on earlier efforts—including a March hiring freeze and budget reductions. USC has already moved to sell the Peace Garden by June 30 and created channels for community feedback on financial recovery strategies.
Moving forward, the university plans to engage faculty, staff, and student representatives to discuss and refine the response to these fiscal challenges. While painful, these measures aim to stabilize USC’s finances before more drastic action becomes unavoidable.
In summary, USC’s growing operating deficit results from combined revenue pressures—healthcare performance, research funding at risk, and fewer international students—forcing leadership to take immediate, difficult steps to safeguard the institution’s future.