The University will reinstate merit pay beginning in the 2027 fiscal year and does not expect additional layoffs in 2025, interim President Beong-Soo Kim announced.
Editor’s Note: This article was updated Nov. 3 at 8:30 p.m. to include additional reporting.
The University expects to eliminate its long-term budget deficit by the end of the fiscal year, which ends June 2026, according to an email to faculty and staff from interim President Beong-Soo Kim on Monday afternoon.
Since July, USC has laid off at least 974 employees according to state layoff data, among other budget cuts, to address the $230 million in operating deficits from previous years.
According to the email, the University does not expect any additional layoffs in 2025. The University will also reinstate merit pay increases beginning in the 2027 fiscal year, though Kim’s message did not specify the amount. These increases were also cut due to the deficit.
The University previously announced layoffs for nearly all Dornsife academic advisors, as well as all of Viterbi’s academic support staff and USC’s cybersecurity department. Up to 200 laid-off employees may be hired back into “reorganized positions” in each department, per Kim’s email.
In March, the University announced a staff hiring freeze and a pause on merit increases for most faculty and non-hospital staff positions that started July 1 to reduce spending.
On July 14, Kim announced that, in addition to implementing layoffs, the University would sell unused properties and adjust compensation for the most-paid employees. In the Monday email, Kim echoed the commitment to adjust compensation for the highest compensated employees by next year.
Since July, the layoff count has continued to increase. The largest batch of layoffs, effective on Sept. 17, affected nearly 300 employees across the Health Sciences Campus and the University Park Campus and included professors, an associate vice provost and dozens of researchers. On that day, Provost and Senior Vice President for Academic Affairs Andrew Guzman said that a “large bulk” of layoffs had been completed in a presentation to the Academic Senate.
“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,” Kim wrote.
Though the University is on track to eliminate its long-term deficit, Kim wrote that the school “cannot afford the luxury of complacency,” writing that there was a need to monitor financial performance, enforce stricter spending decisions and improve collaboration in internal departments.
Kim listed the potential impacts USC may face from the government shutdown in another University statement on Monday.
The list stated that the University has increased non-perishable food items at the Trojan Food Pantry, as it anticipates a higher demand. Since the federal government shutdown began on Oct. 1, a lapse in Supplemental Nutrition Assistance Program benefits has caused thousands to turn to food banks.
The University also stated that H-1B visa and permanent residency applications will be partially impacted by the government shutdown, which could affect international faculty and staff.
According to the list, the University does not anticipate significant changes in its healthcare operations or financial aid decisions, as Medicare and Medicaid are largely continuing during the shutdown and monetary aid has already been dispersed for the fall semester.
“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,” Kim wrote.
