Dear Trojan Community,
In the weeks since our world suddenly changed, the USC community has pulled together in ways that demonstrate both our strength and our humanity. Our faculty, staff, students, and medical personnel have stepped up in remarkable ways to tackle the most complicated and difficult period most of us have ever experienced. We are deeply grateful. We are steadfast in our commitment to keeping you safe and we are thinking of you, your families, and your working life as we weather this storm together.
One of the ways we will get through this is by recognizing the realities we are facing and dealing with them head on. This is a monumental health crisis, and as a significant healthcare provider in Los Angeles, we care for the well-being of our community. And our great medical team is doing just that. At the same time, the economic effects of this pandemic are dire. U.S. jobless claims rose by 10 million in the past two weeks, manufacturing is grinding to a halt, and millions of Americans are sequestered in their homes. We are experiencing an unprecedented situation. No one knows how long it will last. But we are confident we will come out of this stronger.
Now is the time for us to look inward to ensure that when USC emerges from this crisis, we will remain the thriving research university that has and will continue to make our community, our city, and our world a better place. We need to make some tough calls right now to address the serious financial consequences we face.
Despite our resilience and liquidity, the magnitude of the shock will be significant. We are experiencing sizable additional costs associated with stopping the spread of COVID-19 in our 80,000 strong community and we are suffering a significant decline in many important sources of revenue. We are seeing slowdowns in philanthropy and declines in endowment value. We are also experiencing revenue losses from lower collection rates on student and donor receivables, reductions in clinical revenue, uncertainty about enrollment rates, and increased need for financial aid. Moreover, we are still dealing with the significant financial and cash ramifications of legacy legal issues, including the $215 million federal settlement in the Tyndall case.
We are taking some immediate steps, as follows, to better position our University for the future. We did not make these decisions lightly but taking swift action now will leave us with more flexibility as this crisis unfolds. In the coming days and weeks, we will collaborate with leaders across the University on any future adjustments we may need to make to address the ongoing financial impact.
Pause in Hiring – Effective immediately, we are pausing University-wide hiring for faculty and staff positions until further notice. Our objective is to focus support on our existing faculty and staff. Deans will review with the Provost the status of authorized, ongoing faculty searches and jointly determine which, if any, can proceed this spring. Additional guidelines, which will include an exception process, will be announced shortly.
Pause in Merit Increases and Senior Leadership Compensation Reductions – We have decided to pause merit increases for both faculty and staff. Any staff exceptions must be approved by the Senior Vice President of Human Resources and the Senior Vice President, Finance. Academic exceptions must be approved by the Provost. Due to unprecedented challenges faced by the faculty and staff of our clinical enterprise and our first responders, a salary program will be developed for these groups. Groups in bargaining units will receive pay as dictated by contracts.
The University’s senior leadership has volunteered to take a reduction in compensation. The President will be taking a 20 percent reduction, while the Provost, Senior Vice Presidents, and Deans will give 10 percent. The resulting funds will be donated to provide financial aid and emergency assistance to our undergraduate, graduate, and professional students as well as our employees.
Pause on Travel – All non-essential USC business travel remains suspended until further notice.
Pause on Discretionary Spending – We are pausing discretionary spending on food, meals, events, holiday parties, gifts, recognition banquets, and other expenditures that are not critical to the operation of the University.
Pause on Capital Projects – We will re-evaluate all capital projects.
Summer Programs – Given the uncertainty of when the campus will open again, all in-person summer programs and associated in-person activities will move to online offerings through the end of the first summer term. In addition, there will be no summer learning abroad programs. In late April we will evaluate if we can have in-person on campus activities for the second summer term.
We understand the uncertainty that the COVID-19 crisis has created for our community and we are so grateful for how everyone is working together during these difficult times. Given the extraordinary nature of this crisis, we will continue to evaluate the global economic situation as well as our own, look for opportunities for improvement, and communicate regularly with you.
Thank you for your dedication to USC.
Charles F. Zukoski
James M. Staten
Senior Vice President, Finance
cc: President’s Senior Leadership Team
Provost’s Leadership Team