Harvard University has announced staff layoffs at its John A Paulson School of Engineering and Applied Sciences (SEAS), citing mounting financial strain due to federal funding cuts and higher taxes on university endowments.
David Parkes, Dean of SEAS, said in a statement on Thursday, October 9, that “new federal policies, including a forthcoming increase to the endowment tax, and an expected reduction in indirect recovery rates and changes to the allocation of research funding, have signaled the start of a fundamental shift in the relationship between research universities and the federal government.”
He added that “even with the recent reinstatement of existing grants to Harvard, this shift is placing enormous financial pressure on every school across the University and our peer institutions around the country.”
According to The Boston Globe, which first reported the development, about 40 employees are expected to lose their jobs. The university has not confirmed the number.
Parkes said the decision to downsize was unavoidable given the school’s financial shortfall. “We cannot bridge the budgetary gap without reducing our workforce,” he wrote, adding that he had “made the difficult decision to lay off members of our staff and significantly restructure several offices.”
Harvard, the wealthiest and oldest university in the United States, with an endowment of $53 billion, has been at odds with the Trump administration in recent months. The White House froze over $2 billion in research funding earlier this year, alleging the university tolerated antisemitism on campus following Hamas’ October 2023 attack on Israel.
The administration later widened its scrutiny, accusing Harvard of political bias, maintaining questionable ties with China, and promoting diversity policies it deemed excessive.
Former President Donald Trump said last month that a settlement was close, with Harvard expected to pay about $500 million and establish trade schools as part of the deal.
In September, Harvard secured a significant legal victory when a federal judge ruled that the government had violated the university’s free speech rights by suspending billions in research funding. The administration has since appealed the ruling. Soon after the judgment, $46 million in previously frozen federal funds were released to the university.
As per Harvard’s latest financial disclosures, sponsored research, largely backed by federal grants, contributes nearly 37 per cent of SEAS’s annual operating budget.