The University of Chicago announced Thursday that it will implement a series of changes intended to improve its financial situation, citing new challenges created by the Trump administration’s policies toward higher education. The changes aim to reduce spending by $100 million over the next several years.

The announced changes include reducing the hiring rate of tenure-track faculty by 30 percent, reducing the overall internally-funded Ph.D. population by 30 percent by academic year 2030–31, pausing new capital projects outside the quad and reducing the size of the planned New Engineering and Science Building (NESB), and reducing unrestricted funding of centers by 20 percent. Non-clinical staff will also be cut by between 100 and 150 employees.

“On the one hand, the profound federal policy changes of the last eight months have created multiple and significant new uncertainties and strong downward pressure on our finances. The University needs to be in a financial position to manage through a situation where even one or two of these risks comes to pass. On the other, despite important progress that all of you worked so hard to contribute to over the last two years, our annual income still falls short of our expenses,” University President Paul Alivisatos wrote in a statement announcing the changes on Thursday. “That is not something that we can allow to persist.”

In a Thursday letter, Provost Katherine Baicker noted that the University’s numbers of tenure-track faculty had increased by over 20 percent in the last decade. While she stated that there are no plans to remove current faculty, the University is reducing its hiring rate to keep the total number of professors steady at its present level.  

A faculty committee will also be convened to discuss options for faculty retirement. 

The University also indicated a goal of reducing its internally-funded Ph.D. population. To that end, along with enrollment freezes in the Division of the Arts & Humanities, the Harris School of Public Policy, and the Crown School of Social Work, Baicker wrote that other divisions—including those which receive significant federal grant funding—“will be reducing the number of PhD students without external funding by shrinking cohorts, requiring students to move onto grants more quickly, or shortening time to degree.” 

Some master’s programs will also see admissions pauses, and smaller programs will be reviewed to determine potential enrollment floors.

According to Baicker, because of “limited capital funds and great uncertainty about future infrastructure support,” the NESB will be scaled back in size, and while it will still house quantum and teaching laboratories, there will be limited space for future expansion. In the future, capital projects will only begin construction once 75 percent of funding has been identified.

Baicker’s letter also introduced “systematic evaluations” going forward for the University’s institutes and centers, numbering more than 140, including the Becker Friedman Institute for Research in Economics, the Institute of Politics, and the Chicago Forum, which she said would ensure that seed funding for new centers could become available once existing centers become self-sustaining or wind down. 

The University is also undertaking reductions in its administration and may ask leaders to take on multiple responsibilities to facilitate this. The administration is also collaborating with the divisions to assess leadership structures to ensure that faculty have more time to focus on teaching and research.

In fiscal year (FY) 2024, UChicago’s budget deficit hit $288 million against a $3.2 billion operating budget. In November 2024, Baicker and Enterprise Chief Financial Officer Ivan Samstein announced that increased revenue growth had narrowed the projected deficit for FY2025 to $221 million, along with plans to eliminate it completely by FY2028.

The University was on track to meet that goal until January, when the financial picture began to look “pretty different,” due in large part to federal funding cuts and uncertainty surrounding future international student enrollment, Baicker told the Maroon in May.

“[W]e were largely able to stay on track with our financial plan in the fiscal year that just ended despite substantial erosion of key external resources,” Baicker wrote on Thursday. “But the increasing external financial pressures—including potential federal policy changes that could lead to fewer international students, reduced grant support, reduced Medicaid coverage, increased capital costs, and more—combined with the ongoing need to close our structural deficit, require additional measures.”

“This overall approach is designed to preserve and build on our university’s exceptional culture and strengths, where dedication to free and rigorous inquiry has generated so many breakthroughs and trained future generations of exceptional scholars and thinkers,” she continued. 

Baicker and Samstein have previously discussed pursuing sources of external support, such as nonprofits and foundations, beyond traditional federal grants. They also cautioned that the value of lost grant awards could double or triple over the next year as additional grants are cut and new grants are not awarded. 

The changes will pose “real challenges for our faculty, students, and staff,” who will “need to work together during some difficult transitions” ahead, Baicker wrote in her letter.

Celeste Alcalay contributed reporting.