Stanford University will lay off at least 363 employees this fall as part of $140 million in budget cuts driven by rising costs and changes in federal funding policies, including a steep revision to the endowment tax.
The layoffs will affect a wide range of staff roles, such as academic operations managers, IT business analysts, librarians, and administrative associates, according to a WARN notice filed with the California Employment Development Department on July 31.
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In a letter accompanying the notice, Stanford Vice President for Human Resources Elizabeth Zacharias cited “ongoing economic uncertainty in 2025,” which she said has created “serious operational and financial challenges for higher education institutions.”
Zacharias said anticipated reductions in federal research funding and the revised endowment tax structure are expected to have “significant budgetary consequences” for the university.
Although a proposed 21% tax on endowments was not included in the recently passed federal budget, the existing flat 1.4% rate was replaced with a new multi-tiered structure of up to 8%, with larger endowments — such as Stanford’s — subject to the highest rate. Stanford previously estimated the new tax could cost the university up to $637 million.
Zacarias added that layoff numbers could change depending on evolving circumstances, leaving the door open to potential future layoffs.
“We will provide notice of any additional layoffs as required under the California WARN Act,” she wrote.
University officials began holding town halls with students and campus groups in April to discuss the federal budget’s impacts. Despite the financial strain, leaders said the cuts are intended to protect Stanford’s long-term goals.
In nearby San Mateo County, where Stanford owns a hospital campus and many university employees live, Board of Supervisors President David Canepa slammed the layoffs as a blow to local families and the economy.
“Stanford’s announcement that it is laying off hundreds of hardworking employees is a gut punch to our local economy and to families already struggling to make ends meet,” Canepa said. “Make no mistake, these cuts are the direct result of the so-called ‘Big Beautiful Bill,’ a devastating piece of federal legislation that prioritizes politics over people.”
Asked what support the university will provide to affected employees, a Stanford spokesperson referred to a letter sent last week by university President Jonathan Levin and Provost Jenny Martinez. The letter said Stanford is “providing support resources as well as layoff benefits to eligible employees.”
“Nonetheless, these are difficult actions that affect valued colleagues and friends who have made important contributions to Stanford,” Levin and Martinez wrote.
At $37 billion, Stanford has the third-largest endowment in the U.S., behind Harvard’s $50.7 billion and Yale’s $40.7 billion. It is also Silicon Valley’s largest landowner, holding more than 8,000 acres in Santa Clara and San Mateo counties.
Despite its wealth and influence, Stanford began signaling financial strain earlier this year amid federal cuts to research and education funding. In February, it withdrew from a planned purchase of the 100-acre Notre Dame de Namur University campus in Belmont, citing financial uncertainty.
In fiscal year 2024, Stanford disbursed $1.8 billion from its endowment to fund academic programs and student financial aid, according to the university. About 5% of the endowment is spent annually, with roughly $456 million going toward financial aid and 23% supporting faculty salaries, libraries, student services, athletics, and research.
According to Stanford, more than 75% of the endowment’s annual payout is restricted by donors for specific uses — such as supporting first-generation college students or designated academic fields.
“It’s the income generated from investing the endowment, not the endowment principal itself, that supports our annual operating budget,” said Randy Livingston, Stanford’s vice president for business affairs and CFO, in a statement on the university’s website. “If we start to consume the endowment principal, there will be less to invest and therefore less income to support the university in future years.”
In their letter to the Stanford community, Levin and Martinez acknowledged the broader impact of the cuts.
“We also know that many of you will need to make adjustments going forward as a result of budget cuts,” they wrote. “Thank you for your hard work, for your support of your colleagues, and for all of your efforts to support our vital ongoing mission of research and education.”
Staff writer George Avalos contributed to this report.