February 27, 2025 - American Public News

ITHACA, N.Y. — Cornell University has initiated a four-month hiring freeze in all college, school and administrative units, citing “a time of significant financial uncertainty” in an internal letter to faculty and staff Thursday afternoon.The announcement comes on the heels of potential National Institute of Health (NIH) research reimbursement cuts as well as congressional proposals to impose new federal taxes on universities with large endowments.In the letter, interim President Michael Kotlikoff said the university is “initiating strategic budgetary adjustments” across all of the university’s academic and administrative departments. The Ivy League institution is the largest employer in Tompkins County. “The potential for deep cuts in federal research funding, as well as tax legislation affecting our endowment income, has now been added to existing concerns related to rapid growth and cost escalations,” the letter states.In February, President Donald Trump signed an executive order that would have resulted in significant cuts to research funding through the National Institutes of Health. The order was temporarily blocked by a federal judge earlier this month, but has plunged the academic research world into turmoil.In general, not-for-profit colleges and universities are tax-exempt, though there are some exceptions. In 2017, Trump imposed a 1.4% tax on income derived from university endowments, but recent proposals from congressional Republicans would implement drastic increases on the endowment tax. The letter blames the financial uncertainty for the decision to “pause starting new searches for personnel until June 30” and further directs department leaders to cut costs and review any currently active hiring process. “We are asking all deans, vice provosts, vice presidents, and unit leaders to focus on their core strategic needs, and trim budgets through mechanisms such as strategic restructuring for efficiency and reducing expenses, including nonessential travel and discretionary spending (such as food and events),” the letter states. It is unclear if the “strategic restructuring” directive includes layoffs. The Ithaca Voice requested more clarity, but a Cornell spokesperson declined to comment further. A new “central position control committee,” reporting to Provost Kavita Bala, will evaluate requests for hiring exceptions during the freeze. The letter characterizes the stoppage as a chance for the university to “assess and model the financial impact of evolving federal policies.”Cornell joined several other universities in a lawsuit earlier this month to block the Trump administration’s proposed NIH cuts from being enacted. According to the lawsuit, Cornell spent $452 million on research for over 1,600 NIH awards last year, receiving $137 million in reimbursements for indirect costs. The lawsuit states that Cornell has 1,207 NIH awards for the rest of 2025, and estimates that the school would lose over $42 million the rest of the year if the cuts are enacted. “Cornell relies on both the direct cost and the indirect cost portions of funding provided with each NIH award to formulate its overall operating budget in any given year,” the lawsuit states. Cornell’s operating budget this year is $5.8 billion. Earlier this month, Republican members of Congress introduced proposals that would raise the federal tax on endowments at universities with more than $500,000 endowed per student enrolled. One proposal would raise the tax on endowments from 1.4% to 10% and lower the threshold to $200,000 endowed per student, while another would raise the tax to 21% to match the corporate tax rate. Data from 2022 shows that among other Ivy League schools, Cornell University has one of the smaller endowments in relation to enrollment at $395,108 endowed-per-student. If the university was subject to such a tax, it would likely pay hundreds of millions more in taxes annually. Overall, Cornell’s endowment is the 18th-largest in the nation. “It is imperative that we navigate this challenging financial landscape with a shared understanding and common purpose to continue to advance our mission, strengthen our academic community, and deepen our impact,” the letter states. “As a community, we have always emerged stronger from challenging periods, and we have no doubt that we can and will do so again.”Correction: The letter was sent to faculty and staff, not just department heads, as this article initially stated. The post Cornell freezes hiring, asks department heads to cut costs amid “financial uncertainty” appeared first on The Ithaca Voice.First published by The Ithaca Voice.

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