Penn implemented several “proactive financial measures” — including a hiring freeze and a review of capital spending — as the impact of recent federal funding cuts remains uncertain, according to an email sent on Monday.
In a March 10 message, Provost John Jackson Jr. and Senior Executive Vice President Craig Carnaroli announced six University-wide financial measures to protect Penn’s “core principles and support existing people and programs.” While Jackson and Carnaroli noted the uncertainty surrounding “the extent and final impact of [federal] policies,” the cost-cutting measures will go into effect “immediately and until further notice.”
“The scope and pace of the possible disruptions we face may make them more severe than those of previous challenges, such as the 2008 financial crisis or the COVID pandemic,” the email said.
According to the message, a new review of faculty hiring will permit only “searches that Schools deem essential to their missions and their highest critical priorities.” The University will also ensure that restricted funds — which are provided to institutions with specific instructions — “are used for permitted purposes and maximize support of current operations.”
Staff hiring will also be frozen “except for critical positions, student workers, and those funded by active grants or restricted sources.” In order for a staff member to be hired, a request must be made and submitted to the school and approved by the provost and senior executive vice president, according to the email.
Penn will also implement a freeze on staff salary mid-year adjustments, “including non-merit salary adjustments and position reclassifications that are not already in process” for the remainder of the fiscal year.
Penn’s schools and centers will also “carefully review budgets and limit non-essential spending” and implement a five percent reduction in non-compensation expenses, according to the email.
The Monday email referenced Interim Penn President Larry Jameson’s Feb. 11 message to the Penn community regarding changes to federal research funding. The initial email was sent after a Feb. 7 directive from the National Institutes of Health that capped “indirect costs” — which provide funding for overhead research costs such as lab spaces and support staff — at 15%.
In his Feb. 11 message, Jameson emphasized that the University stands to lose $240 million from the proposed funding cuts and reiterated Penn’s commitment to “identify solutions to minimize the impact” of the federal action.
At the Feb. 28 stated meeting of the University Board of Trustees, Jameson emphasized Penn’s mission amid challenges in higher education. He reaffirmed Penn’s commitment to academic excellence, inclusivity, and open discourse.
“Penn and American higher education face challenges that we haven't seen in our lifetimes, both fiscal and philosophical,” Jameson said. “While Penn has always upheld the law and will continue doing so, we must be clear eyed about our future, which may alter dramatically depending on how these developments unfold.”
The changes come amid similar cuts to faculty hiring and infrastructural projects across other Ivy League institutions. On March 6, Yale University announced reductions to spending on faculty raises, staff hiring, and campus construction. Harvard University also announced a hiring freeze across all schools and divisions.
“We continue our advocacy effort both communicating the impact to our elected representatives and working closely with industry associations to underscore the critical role federal funding plays in fulfilling our mission and benefitting society,” Jackson and Carnaroli wrote in the email. “While painful, such planning is a prudent safeguard for the future of our exceptional academic community.”
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