Carnegie Mellon University has made the difficult decision to lay off 75 employees from its esteemed Software Engineering Institute (SEI), impacting 10% of the institute’s workforce. This significant reduction comes amidst growing unease over changing federal research funding landscapes.
According to a message to the university community from Vice President for Research Theresa Mayer, these job cuts are a direct consequence of financial pressures stemming from evolving funding priorities in Washington. The SEI, which primarily receives sponsorship from the U.S. Department of Defense, specializes in critical areas such as software engineering, cybersecurity, and artificial intelligence research, all vital for supporting federal agencies.
Funding Shifts Impact Key Research Hub
Despite Carnegie Mellon’s overall stable financial standing—University President Farnam Jahanian announced in August that the institution anticipates no deficit for the current fiscal year—the SEI faces distinct challenges. Jahanian had previously indicated a university-wide effort to cut $33 million in expenses to mitigate fiscal strains.
However, the SEI has been particularly vulnerable to recent federal policy changes. In fiscal year 2024, the institute generated $148.8 million in grants and contracts revenue. Yet, even after implementing extensive cost-saving measures, Mayer confirmed that the institute could not reallocate or absorb costs, making staff reductions unavoidable.
Legal Battles Over Overhead Caps
Adding to the university’s financial concerns are potential losses from proposed federal caps on indirect research costs. The previous administration attempted to impose a 15% reimbursement cap across several federal agencies. Carnegie Mellon is actively challenging these policies in court, notably as a plaintiff in a lawsuit that successfully blocked the cap at the National Institutes of Health. This ruling is currently under appeal, and the university is also pursuing legal avenues through the Association of American Universities.
President Jahanian estimates that if the 15% cap were to be fully enacted, Carnegie Mellon could face an additional annual shortfall of $40 million. These indirect costs are crucial for maintaining essential research infrastructure, including laboratories, utilities, and vital administrative support.
Enrollment Declines Compound Financial Strain
The university’s financial challenges extend beyond research funding. Carnegie Mellon projects $365 million in graduate tuition revenue for the current fiscal year, approximately $20 million less than initial estimates. This decline is attributed to lower-than-expected enrollment figures, though specific reasons for the shortfall were not detailed by Jahanian.
In response, the university is evaluating its student demographics, specifically the balance between undergraduate and graduate, and international and domestic students, to ensure long-term stability. Other institutions, such as DePaul University, have also reported significant decreases in international graduate enrollment, linking these trends to visa processing delays and more restrictive U.S. immigration policies. From 2018 to 2023, Carnegie Mellon’s total enrollment grew by 11.2% to 15,596 students, with graduate enrollment increasing by 11.7% to 8,307. Despite this growth, federal funding cuts and fluctuating enrollment continue to pose significant challenges for strategic institutional planning.