The University of Pennsylvania will freeze most staff and faculty hiring to prepare for cuts to federal funding that the Ivy League school expects to be more disruptive than the 2008 recession and the COVID-19 pandemic, officials said Monday.
Penn and other universities have spent weeks bracing for anticipated moves by the Trump administration that will dramatically reduce funding used to defray the indirect costs of running large research programs. A proposed cap on money that supports National Institutes of Health research would slash annual funding for Penn by about $240 million, with the potential for steeper cuts if other federal agencies were to adopt similar measures, the university said.
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"Although the extent and final impact of these policies will not be known for several months, the direction is clear, and we are already experiencing reduced funding," Penn Provost John L. Jackson Jr. and Senior Executive Vice President Craig R. Carnaroli wrote in an email to the Penn community Monday.
Penn is among the largest private employers in Philadelphia, with more than 20,000 total faculty and staff.
Monday's announcement came as many of Penn's peers, including Harvard University and the Massachusetts Institute of Technology, also said they will freeze hiring to maintain financial flexibility in the face of cuts. Columbia University, Cornell University, Stanford University and the University of Notre Dame are among a growing list of colleges that revealed similar measures Monday.
Penn outlined a series of financial steps it will take to sustain existing programs as the scope of the cuts becomes clear in the coming months.
All staff hiring will be frozen with the exception of critical positions, student workers and roles already funded by active grants and other sources. Faculty hiring will be restricted to searches for positions that are deemed essential to the missions and highest priorities of Penn's schools and centers.
Mid-year salary adjustments for staff, including all non-merit raises and position reclassifications, will be frozen, the university said.
"We recognize the strain that these policies put on our community – and the uncertainties surrounding their timing and impact," Monday's letter said.
Among other measures, the university said it will review all capital spending on new buildings, renovations and campus projects that are not fully funded or are not considered essential. Penn also said it faces "difficult" decisions ahead about scaling back graduate admissions to the university.
Late last month, Penn Interim President J. Larry Jameson said the university would pursue cost-saving measures in response to possible reductions in NIH-funded research. Penn is among dozens of other research universities that filed a motion in federal court to block NIH cuts, which a judge temporarily barred from moving forward last week.
Opponents of the proposed cuts warn they will cripple scientific research, causing labs to shut down and halting clinical studies that rely on federal reimbursements to maintain facilities and cover administrative costs.
On Monday, Penn said the NIH cuts are among several threats to the university's financial stability. Leaders said they are closely watching proposals in Congress that could roll back student loan forgiveness programs and sharply increase the federal tax on large university endowments from 1.4% to as high as 21%. Penn's endowment stood at $22.3 billion in October, and the university said it accounts for about 20% of the school's total operating budget. In addition to research and other services, the endowment helps cover faculty salaries and financial aid packages for undergraduate and graduate students.
"The scope and pace of the possible disruptions we face may make them more severe than those of previous challenges," Jackson and Carnaroli said, noting past shocks from the Great Recession and the COVID-19 pandemic.
Penn's attempts to navigate a barrage of Trump administration proposals have put the university under pressure from local lawmakers in recent weeks. Penn scrubbed many of its diversity, equity and inclusion initiatives from online resources last month in response to an executive order targeting such programs. The policy shift drew rebuke from city and state leaders who met with university officials to discuss the changes.
“At the first signs of danger, Penn ran for the hills,” City Councilmember Jamie Gauthier (D-3rd) said after the meeting.
The Trump administration also indicated it could withdraw funding from universities that fail to address antisemitism on their campuses. Columbia University had $400 million in federal funding withdrawn last week in response to its "inaction" to address "anti-Semitic harassment," the U.S. Department of Justice said, and nine other universities are included on a list that a federal task force will soon visit for similar reasons.
Penn is not among the 10 schools included on that list, but the university spent months mired in controversy for its handing of student protests related to the war in Gaza. Public pressure from donors culminated in the resignation of former Penn President Liz Magill, who had faced backlash for her wavering congressional testimony about campus antisemitism and academic freedom before she stepped down in December 2023.
Jackson and Carnaroli said Monday that Penn is "well-positioned" to navigate the uncertainty surrounding federal funding.
"While painful, such planning is a prudent safeguard for the future of our exceptional academic community," their letter said.