USC plans to order significant budget cuts

Update (June 29): Multiple officials say layoffs are inevitable as a result of the coming budget cuts.

USC will soon order a significant round of budget cuts, according to internal documents obtained by Morning, Trojan.

Schools will, on average, be directed to permanently cut 5% of their budgets for the upcoming fiscal year. Administrative units will be asked to cut 10%.

It’s unclear when USC plans to officially announce the move. President Carol Folt will leave her post on June 30, and Beong-Soo Kim, the school’s top attorney, will serve as interim president.

USC has ordered a slew of cost-saving measures over the last 12 months in an effort to mitigate its financial crisis — one that predated cuts to federal funding by Donald Trump’s administration. The university has frozen hiring and raises, rescinded doctoral admissions offers, reduced janitorial services, and ordered layoffs.

The latest round of budget cuts adds to the $127 million in annual spending that USC told schools and administrative units to cleave a year ago.

In the 2024 fiscal year, USC ran up a $158 million operating deficit. Moody’s, a credit rating agency, reported in March that the school expects “modest improvement” in fiscal year 2025 “with more substantive improvement” the following year — in large part thanks to budget cuts.

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