Provost and Senior Vice President for Academic Affairs Andrew Guzman said that a “large bulk” of layoffs put in place to resolve a projected $230 million structural deficit for the previous fiscal year have been completed in a presentation to the Academic Senate on Wednesday. 

At least 637 employees have been laid off since interim President Beong-Soo Kim announced the deficit in a July 14 memo, according to state documents reviewed by the Daily Trojan. Layoffs have affected a variety of schools at departments across both the University Park and Health Sciences Campuses, including the Office of Cybersecurity, Keck School of Medicine of USC, Rossier School of Education, Annenberg School for Communication and Journalism, and the Athletics department.

Guzman said USC set a $400 million savings target to address the deficit “in its entirety” during the 2025-26 fiscal year and set the University up to avoid future structural deficits. While schools were not directly asked to reduce their budget via layoffs, Guzman said it would have been impossible to avoid layoffs because a significant portion of USC’s spending goes to salaries.

The University assigned each school a portion of the $400 million savings goal to eliminate from their budget, Guzman said; central administration was asked to cut double the amount of money that the schools were asked to cut. Guzman said any schools or departments that had yet to complete their reduction actions or finalize layoffs “have their good reasons.”

Every unit was asked to submit a plan detailing how they would achieve the number, which was then checked by the University. Administrators then asked the schools to identify if any proposed cuts would endanger USC’s academic mission, according to Guzman. In some cases, the University rejected certain proposed cuts because they determined they impacted USC’s operations too much.

In response to a question about whether the University ensured proper layoff policies were followed, Sandeep Gupta, vice provost for academic and faculty affairs, said reports from the schools were taken “at face value” but were reviewed if anything seemed mishandled. Stacy Roberts, senior vice president of human resources, said the University has worked with the WorkWell Center to make sure laid-off employees are aware of the resources available, including benefits.

“It was quick, but it was not in haste,” Gupta said of the layoff process during his presentation to the Academic Senate.

While Guzman said the unclear state of federal research funding and student visa statuses created an “uncertain” financial environment for the University, he said it hopes to be more stable by the spring in order to bring back merit increases, which he called a “very high priority.” Merit increases were paused July 1.

At a March 26 Academic Senate meeting, Guzman said the University was “overwhelmingly likely” to lose up to hundreds of millions of dollars in federal funding. Then-President Carol Folt also told the senate in March that because USC was still recovering from $2.5 billion in legal and COVID-19 related costs, it complied with some of the Trump administration’s actions, including an information request on Chinese international students from a House of Representatives committee.

Guzman also said USC wants to lift the “pretty strong” faculty hiring freeze and “very strong” freeze for staff in the near future.

The senate also heard from Dr. Sarah Van Orman, chief campus health officer, about what she called “significant changes” to benefit-eligible employee health plans. Van Orman said premium costs for the plans will increase roughly 5% on average, which she said was still lower than the industry standard.

“We’re very sensitive, especially during this time, at keeping costs down,” Van Orman said when asked about why premium prices have increased despite merit increases being on pause.

Come October, Van Orman said USC will no longer offer its Anthem Health Maintenance Organization and Anthem MyChoice HMO plans, meaning the only options will be USC’s Exclusive Provider Organization, EPO Select or Preferred Provider Organization plans. The Kaiser HMO plan will continue for those already under it, but it cannot be switched to, she said.

Van Orman said some of the offerings under current plans, including mental health services, will switch providers but will largely stay the same.