Amid rumors of a possible $100 million settlement offer with the Trump administration, Cornell University is preparing to enact more spending cuts — including a reduction in staff — as it attempts to cope with what its leaders described as “acute fiscal pressures” stemming from several sources.
In a letter from sent to the campus on Friday, Cornell President Michael I. Kotlikoff, Provost Kavita Bala, Provost for Medical Affairs Robert A. Harrington and CFO Chris Cowen wrote that the spending cuts that had been put in place earlier in the year will continue and that additional cost reductions are in the works. The letter follows up on a June “financial austerity” announcement by Cornell officials.
The administrators pointed to reduced government funding, a marked increase in the number of staff, increases in employment costs and other expenses, legal and regulatory expenses, clinical reimbursement pressures at Weill Cornell Medicine, and an “uncertain and unprecedented federal landscape” as reasons why “urgent action is necessary, both to reduce costs immediately and to correct our course over time.”
The cost containment process “will progress in several phases,” the leaders wrote, “beginning with the immediate budget reductions already underway for the current fiscal year across our Ithaca, Cornell AgriTech, Weill Cornell Medicine, and Cornell Tech campuses.” In addition, with rare exceptions, new hiring will remain restricted indefinitely, continuing a freeze the university introduced last February.
As a second step, Cornell will review its university-wide operations to find new efficiencies and reduce duplication, with the aim of centralizing some university functions that are conducted in separate colleges and units. Cornell will also review several of its business processes, from procurement to technology, “rethinking, in fundamental ways, how we allocate our resources.”
Finally, the letters states that the process will require “reducing our workforce — a painful prospect for a community like ours, with a strong sense of shared identity and purpose.” It did not indicate how many personnel would be let go or what units would be most affected.
In April, the Trump administration froze more than $1 billion in federal grants at Cornell for what it claimed were various civil rights violations at the school. Since then the university has reportedly been in negotiations with the administration to resolve the dispute and have that funding restored.
According to various press accounts, the university has considered paying nearly $100 million as part of a settlement with the government. Should that deal come together, Cornell would become the fourth Ivy League university — along with Columbia, Brown and the University of Pennsylvania — to reach an agreement with the Trump administration in recent weeks. Columbia paid a total of $221 million as part of its resolution. Brown struck a $50 million deal to resolve its dispute. Penn did not pay a monetary settlement as part of its agreement to no longer permit transgender athletes to compete in female varsity sports.
Cornell’s administrators said they plan to keep the campus community updated about their budget plans via a series of in-person town hall meetings, writing, “we anticipate that the careful work of planning and analysis will be completed this fall, with reports and phased implementation of restructuring beginning late in this calendar year and continuing into 2026.”