Stanford University lays off 363 employees

• Stanford University laid off 363 staff members last week as part of a plan to reduce its budget by $140 million for the 2025-26 academic year.
• In a July 31 message to campus, senior university leaders attributed the need for cuts to “a challenging fiscal environment shaped in large part by federal policy changes affecting higher education.”
• The private California institution warned of forthcoming layoffs in June, when it extended a hiring freeze implemented in February and said it would focus capital spending on critical projects or those with external sources of funding.

Dive Insight:

According to Elizabeth Zacharias, Stanford’s vice president for human resources, “continuing economic uncertainty” has caused significant difficulties for the higher education industry.

Zacharias stated in a July 31 filing with the California Employment Development Department that “anticipated changes in federal policy — such as reductions in federal research funding and an increase in the excise tax on investment income — are expected to have significant budgetary consequences at Stanford.“

Although some of the Trump administration’s efforts to reduce federal financing on research and development have been temporarily delayed by courts, Stanford, like many other research universities, has been negatively impacted.

Stanford may also be severely impacted by changes to the endowment tax.

According to data from the asset management company Commonfund and the National Association of College and University Business Officers, the university’s endowment, valued at $37.6 billion in fiscal 2024, ranked fourth among American universities.

Colleges did not have to pay taxes on their endowment profits before 2017. A 1.4% tax on private nonprofit universities with endowment assets of at least $500,000 per student was passed by a GOP-controlled Congress that year.

However, a tiered tax based on endowment assets per student was included in President Donald Trump’s signature funding plan. This tax will more than quintuple the levy for the wealthiest institutions, increasing it from 1.4% to 8%. The highest rate will probably be paid by Stanford, which has endowment funds of almost $2.1 million per full-time equivalent student.

These trends, combined with increased operating costs and changes to funding sources and initiatives, pushed Stanford to initiate layoffs, Zacharias said.

According to its website, Stanford has 18,000 professors and staff members.

According to court documents, the impacted workers, who made up around 2% of the university’s employment, were employed in a variety of divisions, including donor and alumni relations, libraries, and student support services.

A university official confirmed Wednesday that qualified employees got severance payments and career transition services in addition to the legally required 60 days of paid notice to affected staff.