Stanford University freezes hiring amid potential federal funding cuts

Stanford University has implemented a hiring freeze, citing financial concerns stemming from potential federal funding cuts and proposed tax changes.

In an open letter released Wednesday, Stanford President Jonathan Levin and Provost Jenny Martinez highlighted the uncertainty surrounding federal support for research as the reason for the freeze.

“To better prepare us to meet these challenges, we are implementing a freeze on staff hiring in the university,” Levin and Martinez said in the letter. “Critically needed positions may be approved by the cognizant dean, vice president, or vice provost, though these situations should be limited.”

They pointed to the National Institutes of Health (NIH) proposal to significantly reduce payments to universities for indirect research costs, a policy currently facing legal challenges at the federal level.

“Though this is currently under review by the courts, a cut of this magnitude would have a significant negative budget impact at Stanford. There is also uncertainty about the level of direct federal funding for scientific research as agencies like NIH and (National Science Foundation) face cuts,” the letter stated.

Stanford did not immediately respond to requests for further specific questions on the hiring freeze.

Despite the freeze, the university emphasized its financial stability, stating, “Stanford is a financially healthy and resilient institution, and prudent planning now will enable us to best support our students, the research of our faculty, and the dedicated and talented staff who support our mission.”

The NIH, with its $48 billion annual budget, is a major source of global medical research funding. While a judge has partially eased restrictions on medical research funding, Stanford remains cautious.

University leadership also expressed concern over proposed congressional expansions to the endowment tax, which would further impact Stanford’s finances.

“This too would negatively affect Stanford’s finances, because the annual payout from the endowment forms a crucial part of our yearly budget,” the letter explained. “The endowment, which supports two-thirds of undergraduate and graduate financial aid, faculty salaries, research, and key programs, is particularly vulnerable.”

With a $37.6 billion endowment and a $9.7 billion budget, Stanford is Silicon Valley’s largest landowner, holding over 8,000 acres in Santa Clara and San Mateo counties.

The hiring freeze announcement coincides with Stanford’s decision to abandon its planned acquisition of Notre Dame de Namur University in nearby Belmont, after four years of negotiations, citing “uncertainties and a different set of financial challenges for Stanford.”