PHILADELPHIA — The University of Pennsylvania has ordered a hiring freeze and other economies as the university braces for the impact of potential federal funding cuts under President Donald Trump’s administration.

The changes are “effective immediately, and until further notice,” according to an email sent to staff Monday and obtained by The Inquirer.

The belt tightening at the city’s largest employer comes as universities nationwide cope with a downturn in finances because of shifting winds in Washington. Columbia University, for instance, lost $400 million; Trump administration officials said the cuts came because it believed the university had not adequately addressed antisemitism. Harvard University, also an Ivy League school like Penn and Columbia, announced a hiring freeze Monday as well.

In the email, Penn provost John L. Jackson Jr. and Craig Carnaroli, the university’s senior executive vice president, said the university would implement a “freeze on staff hiring, except for critical positions, student workers, and those funded by active grants or restricted sources.”

Officials also instituted a 5% reduction in non-compensation expenses.

“Schools and Centers should carefully review budgets and limit nonessential spending,” the officials wrote. “This applies to the remainder of the current fiscal year and for fiscal year 2026.”

They also ordered a freeze on staff midyear salary adjustments and reviews of capital spending and faculty hiring. Jackson and Carnaroli said that they were “only allowing searches that Schools deem essential to their missions and their highest critical priorities.”

Penn’s schools have already begun budgeting and forecasting for the 2025-26 academic year, they said, “including making difficult decisions regarding graduate admissions.”

Penn stands to lose $250 million in federal money as a result of a Trump administration order capping National Institutes of Health spending on funds tied to university and medical institution research. In reaction, the university has already announced a plan to cut incoming doctoral student admissions by a third.

Many Penn researchers have already received stop work orders, and additional federal proposals could affect student loans and increase the excise tax on endowments.

“Although the extent and final impact of these policies will not be known for several months, the direction is clear, and we are already experiencing reduced funding,” Jackson and Carnaroli wrote, adding that they are lobbying elected officials and industry representatives to “underscore the critical role federal funding plays in fulfilling our mission and benefiting society.”

Officials acknowledged “the strain that these policies put on our community — and the uncertainties surrounding their timing and impact. In moments like these, we are guided by our core principles: protecting our missions, sustaining our culture, supporting our people, and judiciously managing our resources.”

Penn has weathered difficult financial times in the recent past — including the pandemic and 2008 financial crisis.

“The scope and pace of the possible disruptions we face may make them more severe than those of previous challenges,” Jackson and Carnaroli said. “With careful financial management, however, Penn is well-positioned to navigate them.”

A Penn spokesperson said the hiring freeze and cuts pertain only to the university; the health system’s finances are managed separately.

“Like other health systems across the country, UPHS has faced significant financial headwinds dating back to the start of the COVID-19 pandemic,” the spokesperson said. “Rising costs associated with labor and supplies as well as changes to reimbursement patterns, among other factors, have necessitated long-term cost containment and re-investment strategies to ensure a sharp focus on providing exceptional patient care and sustained support of the workforce.”

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