On Friday, August 22, Cornell President Michael Kotlikoff issued an announcement regarding further financial steps for 2025-26. In the piece, President Kotlikoff states that “urgent action is necessary.”
These measures address a budget deficit that results from “hundreds of millions of dollars in federal research contracts at Cornell terminated or frozen, and serious threats to future research funding, federal financial aid, medical reimbursement, and research cost recovery, along with an anticipated tax on our endowment income, and rapidly escalating legal expenses.”
In February, Cornell announced a hiring freeze, which is being extended indefinitely in response to the continued Trump threats of research grant cuts.
In March, Day Hall provided the community with an update that announced guiding principles for its financial decisions: opportunity and access, diversity as a driver of our excellence, merit-based decisions, and “follow [ing] the law.” This means that the cuts mentioned in Kotlikoff’s recent statement will comply with lawful Trump Administration requirements while simultaneously promoting diversity. Furthermore, it will select specific individuals or programs on the basis of merit and not prohibited criteria such as race or religion.
In June, the President announced additional measures:
- “We will begin a comprehensive review of programs and headcount across the university. Since June 2021, Cornell’s workforce has grown by more than 15% — greatly outpacing our revenue. This review will engage personnel from every campus, college, school, and administrative unit to streamline processes, create efficiencies, and reduce duplication of work.
- As we prepare to unify our information systems across campuses, we will pursue opportunities to simplify and consolidate operations and deploy technology where appropriate.
- Hiring on all campuses will remain restricted for the 2025-2026 academic year.
- Discretionary expenditures including travel, food, and purchasing will remain restricted for the 2025-2026 academic year.
- Research operations on all campuses will be reviewed to make them more cost effective and efficient.”
The August announcement was an elaboration on how these cost-cutting measures will take shape and an announcement of greater community involvement, specifically through a series of town hall meetings with the Cornell community. Kotlikoff’s announcement states that there will be immediate budget reductions. Second, there will be a ground-up reimagination of Cornell’s processes and programs to find “new efficiencies and reduc[e] duplication of work.” All of this will result in a plan by the end of the Fall Semester with “phased implementation of restructuring beginning late in this calendar year and continuing into 2026.”
These measures indicate that Cornell is beginning its fiscal year with an unbalanced budget, and must take actions, including cutting staff, this fall. A Reddit post has already alluded to significant staff cuts at eCornell.
These fiscal challenges are huge. Cornell’s overall annual budget is over $6 billion, and a significant portion of this amount is threatened by the potential $1 billion suspension of federal grants and payments. Additionally, with class action lawsuits and other litigation, Cornell is facing large legal expenditures. Although Cornell does not disclose its total legal budget, its FY 2024 tax return disclosed legal expenses of $18,972,992, including payments to the Paul Weiss law firm of $6,978,085. There is also speculation that the Trump Administration will require a $100 million payment to settle its case against Cornell for alleged antisemitism and improper DEI practices. Cornell’s restructuring will determine its future financial health and its ability to weather the damage from these upcoming expenses.
