Michigan State University is navigating significant financial challenges, resulting in the elimination of 99 positions and a projected 9 percent budget reduction over the next two fiscal years. The cuts come as the university also grapples with a substantial loss of federal research funding, impacting dozens of projects and staff members.
Key Takeaways
- MSU is implementing a 9% budget cut over two fiscal years to address a projected deficit.
- 99 university positions have been eliminated, including roles in support staff, faculty, and executive management.
- An additional 83 positions were lost due to cuts in federal funding for research projects.
- The termination of 74 federally funded research projects will result in a projected multiyear loss of $104 million.
- The university has launched a Budget Model Redesign initiative to ensure long-term financial stability.
University Implements Sweeping Budget Reductions
In a recent communication to the university community, Michigan State University President Kevin M. Guskiewicz outlined the institution's response to a projected budget deficit. The plan involves a comprehensive 9 percent budget reduction spread across the current and upcoming fiscal years.
The first phase of these cuts, a 6 percent reduction, was implemented at the beginning of the current fiscal year on July 1. These measures have already had a direct impact on the university's workforce.
As of mid-October, a total of 99 positions have been eliminated. These cuts were distributed across various departments, affecting support staff, faculty, academic staff, and several executive management roles. University officials noted that this figure does not account for other staffing changes, such as reduced work hours or the non-renewal of fixed-term contracts.
Understanding the State Funding Picture
While MSU received a 2.1 percent increase in state funding this year, totaling $333.8 million, President Guskiewicz clarified that this amount was already incorporated into the existing budget plan. More importantly, the state has designated this increase as a one-time adjustment, which does not provide a recurring revenue stream for long-term financial planning.
Federal Research Funding Loss Amplifies Challenges
Compounding the internal budget issues, MSU is facing a significant and unexpected reduction in federal research funding. This has led to the loss of an additional 83 positions that were directly supported by federal grants.
The financial impact is substantial. Federal agencies have terminated 74 research projects at the university. According to MSU's projections, these terminations will result in a staggering $104 million loss in funding over multiple years.
Projects and Agencies Affected
The terminated projects were supported by a wide range of prominent federal agencies, highlighting the broad impact of the funding withdrawal. These agencies include:
- The National Science Foundation (NSF)
- The U.S. Agency for International Development (USAID)
- The National Endowment for the Humanities (NEH)
- The National Institutes of Health (NIH)
- The U.S. Department of Agriculture (USDA)
Beyond the outright terminations, an additional 86 research projects are in a state of uncertainty. These projects have been affected by stop-work orders, delays in future funding decisions, or have received conditional termination notices.
Workforce Impact at a Glance
Since March 1, 2025, the combined effect of internal budget cuts and federal funding reductions has impacted approximately 1.3 percent of Michigan State University's total workforce.
A Path Forward: Restructuring for Sustainability
In response to these financial pressures, MSU's leadership has initiated a comprehensive review of its financial systems. The new Budget Model Redesign initiative is being co-led by Provost Laura Lee McIntyre and Chief Financial Officer Lisa Frace.
The primary goal of this initiative is to create a more transparent and sustainable financial framework for the university. By re-evaluating how resources are allocated, MSU aims to align its spending with its core academic and research missions while ensuring long-term stability.
President Guskiewicz has indicated that the university will continue to monitor spending closely and review staff vacancies throughout the year. This approach is intended to minimize the need for further layoffs as the next round of budget reductions is planned for fiscal year 2027.
"I am deeply grateful to every faculty and staff member who continues to serve our students and one another," President Guskiewicz stated. "What has been most evident through this process is the care our community shows for one another — even amid challenges. MSU’s strength has always been our people, and that remains true now and into the future."
Further details on the university's financial planning are expected to be shared toward the end of the current fiscal year, once individual colleges and units have finalized their spending plans for the coming years.
