Dive Brief:
- Carnegie Mellon University has laid off 75 employees in its Software Engineering Institute as it wrestles with disruptions to federal funding, according to a community message Wednesday from Vice President for Research Theresa Mayer.
- Mayer tied the cuts — which amount to 10% of SEI’s workforce — to the engineering institute’s “unique financial structure as a federally funded research and development center as well as the shifting federal funding priorities that are shaping the research landscape.”
- Carnegie Mellon as a whole is in a “strong financial position” for fiscal 2026, university President Farnam Jahanian said in August, noting that the Pittsburgh institution cut its expenses by $33 million.
Dive Insight:
Jahanian said in an August community message that Carnegie Mellon is poised to get through the current fiscal year without a deficit, which is more than some of its peer institutions can say.
But the university faces stiff financial headwinds — and what its president described as “existential challenges” — from the Trump administration’s disinvestment in scientific and academic research.
To tighten its budget, Carnegie Mellon has paused merit raises, reduced nonessential expenditures, limited new staff and faculty hiring, and has reduced staff in certain units through voluntary retirements and employee reductions.
In the August message, Jahanian described “signs of a marked decline in the pipeline of new federal research awards nationally and at Carnegie Mellon.” He added that university officials expect more cutbacks in federal agencies’ research budgets under a Republican-led Congress.
The university’s Software Engineering Institute, which Mayer described as integral to Carnegie Mellon’s overall research enterprise, is one of the institution’s biggest recipients of federal research funding. Sponsored by the U.S. Department of Defense, SEI develops new technologies and studies complex software engineering, cybersecurity and AI engineering problems, in large part to advance the strategic goals of federal agencies.
The institute took in $148.8 million in grants and contracts revenue in fiscal 2024.
Prior to this month’s job cuts, officials at the institute took “extensive steps to avoid this outcome, including implementing cost-saving measures in recent months,” Mayer said Wednesday. “Despite these efforts, SEI was unable to reallocate or absorb costs, so staff reductions were unavoidable.”
Along with a slackening grant pipeline, Jahanian’s August message pointed to the possibility of reduced funding for research overhead costs.
The Trump administration has sought to unilaterally cap reimbursement rates for indirect research costs at 15% across multiple agencies, though these policies have been blocked by courts.
Carnegie Mellon is a plaintiff in one of the lawsuits that led to the 15% cap being permanently blocked at the National Institutes of Health, though the Trump administration has appealed the ruling. The university is also represented in lawsuits against other agencies through its membership in the Association of American Universities.
If a 15% cap were implemented on research overhead, that would create an additional $40 million annual shortfall for Carnegie Mellon, according to Jahanian. Indirect research costs include overhead expenses such as laboratories and support staff.
Beyond federal funding woes, Jahanian also noted in August that Carnegie Mellon’s projected $365 million in graduate tuition revenue for the current fiscal year is about $20 million short of initial estimates due to “lower-than-expected enrollment.”
While Jahanian didn’t offer reasons for the shortfall, he did note that going forward Carnegie Mellon was examining its balance of undergraduate to graduate and international to domestic students to “ensure long-term stability.”
Other universities have experienced major declines in their international enrollment amid the Trump administration’s disruptions to the visa approval process and aggressive immigration policies.
Officials at DePaul University, in Chicago, said recently that new international graduate student enrollment fell by 62% year over year this fall, contributing heavily to a budget crunch at the institution.
One group has predicted that international enrollment could drop by as much as 150,000 students this fall.
In recent years, Carnegie Mellon’s enrollment has grown, as has its graduate student ranks. Between 2018 and 2023, overall enrollment increased 11.2% to 15,596 students and graduate enrollment grew 11.7% to 8,307 students.
