November 3, 2025
Dear Faculty and Staff,
I am writing to provide an update on our financial resilience efforts.
Over the last several months, our university has undertaken an extraordinary effort to strengthen its financial foundation and prepare for uncertainties facing all of higher education. While this effort has been necessary to protect the university’s core academic mission and ensure its long-term impact and growth, that does not mean it has been easy. Since July, over 900 layoff notices have been issued across the university and health system, although the ultimate number of individuals leaving USC will be lower due to efforts underway to place as many as 200 impacted employees in reorganized positions. The layoffs, of course, fall most heavily on those losing their jobs, but everyone else in our community also feels their impact – through the emotional strain of losing colleagues and friends, the resulting stresses on departments and units, and the challenge of doing more with fewer resources.
As difficult as these last several months have been, the response from so many members of our community has been just as remarkable. Hundreds of staff and faculty have submitted ideas – many of which have now been adopted – for how to eliminate unnecessary outside expenses and reduce internal costs. We recognize that the temporary controls on expenditures and travel have felt burdensome, but they have also helped us avoid further layoffs. Beginning next year, we are also ending a discretionary payroll practice benefitting many of the highest compensated members of our community, resulting in additional savings for the university.
As a result of these and other collective actions and sacrifices – and thanks to the strong leadership and alignment of the deans, senior leaders, and so many others – we can report the following:
- We have significantly reduced our operating expenses and are currently on track to eliminate our long-term deficit by the end of this fiscal year.
- Almost all schools and units have now completed their budget-related layoffs, and we do not anticipate any additional layoffs for the remainder of 2025 beyond what may already have been communicated locally.
- New research awards, advancement, and endowment performance have all been tracking favorably this year.
- Based on our financial performance to date, we fully expect to be able to provide merit increases for FY27, although the process for determining the size of the merit pool will not be completed until early next year. We recognize the importance of merit increases – and preserving key benefits – to retaining the talent we need to carry out our mission.
Notwithstanding this encouraging news, we cannot afford the luxury of complacency. First, our fiscal progress must be monitored carefully to ensure we reach our budgetary goals for this fiscal year and can sustainably generate positive margins in the future. We have developed tools to help track real-time financial performance, and have imposed greater discipline on spending decisions to ensure we are allocating resources – across both the university and health system – in accordance with our highest, long-term strategic priorities and needs. I am committed to keeping the community updated as the year proceeds.
Second, it’s important to take advantage of this moment to ask how we can reduce internal friction points and inefficiencies, streamline processes, and make it easier to collaborate. These questions present important opportunities to reconsider how we have done things in the past and better align our work moving forward. These efforts are underway but require additional focus at every level of our university and health system.
Third, higher education continues to face significant stresses, uncertainty, and scrutiny over how we can better deliver on our mission. Even as I write, we are monitoring potential impacts from the ongoing government shutdown, and planning for reductions in federal student loans and other contingencies next year. More disruptions are coming, even if we can’t predict their timing or form. During these volatile times, it’s important to be agile, remain open to different perspectives and ideas, and never lose sight of our long-term mission and values.
USC is up to these challenges – and they are absolutely worth taking on. While the last several months have been difficult, they have also provided an opportunity for us to engage frankly with each other, proven that we can overcome major hurdles together, and reminded us of the enduring importance of our mission and work. With the stronger financial foundation we are building, we will be able to further enhance the student experience, make more strategic hires, invest in new and existing programs, and accelerate research and clinical innovation. That is the light at the end of this tunnel, and thanks to your collective efforts over the last several months, that light is now much closer.
Fight On!
Beong-Soo Kim
Interim President