After months of reviewing the viability of its academic programs, Portland State University is entering the next phase of its effort to achieve financial sustainability.

PSU President Ann Cudd announced Monday that the university will pursue retrenchment, a formal process to downsize the institution.

“I’m taking this step because after reviewing the results of our work, it has become clear that our financial condition is such that departmental reductions or eliminations may be unavoidable,” Cudd said in a morning press conference.

In a letter to leaders of the union representing PSU faculty, the PSU American Association of University Professors or PSU-AAUP, Cudd identified 19 academic departments that could see reductions.

Degree programs in departments like history, philosophy, economics, politics and criminal justice could be affected. Others like PSU’s interdisciplinary general education bachelor’s degree program, known as university studies, could be eliminated entirely. The possible cuts range from certificate to doctoral programs.

Portland State is Oregon’s third largest public university by enrollment. The commuter school, located in downtown Portland, is a prominent institution in the state, but years of declining enrollment has plunged PSU into financial chaos.

Retrenchment could have serious consequences for people who teach and learn at Portland State. It’s a mechanism that allows PSU to make sweeping cost-cutting decisions on its workforce and academic programs when the university is under financial hardship.

Tenured faculty, whose jobs are typically considered permanent, could find their positions on the cutting room floor too.

“It’s just a decimation of some of the most crucial forms of learning that we offer students here,” said PSU-AAUP President Bill Knight about the list of possible department cuts.

“I think we’re abdicating responsibility to take this much more seriously and much more patiently than we are,” he said.

For many faculty at PSU, Monday’s announcement comes as no big surprise.

The university has suffered from a series of back-to-back budget deficits over the past few years. The shortfalls are largely driven by years of falling enrollment, increasing operational costs and stagnant financial support from the state.

Portland State is looking to close a projected $35 million deficit by the end of the 2026-27 school year. University leaders launched a new fiscal sustainability plan last year that they said will help administrators make strategic changes to academic programs, faculty positions and other non-academic departments.

Cudd, who was hired in 2023, has not hidden the fact that reductions were a key part of the plan.

“PSU is facing a future where it’s going to have to operate as a smaller institution than it has over the past decade,” she said at a board committee meeting last fall.

Matt Chorpenning, president of PSU’s Faculty Senate, said faculty have been bracing for cuts ever since.

“I’ve talked to several colleagues who are pretty certain that they’re not gonna have a job in a year,” he said late last week. “These kinds of worries drive down morale across campus at a time when it’s already pretty catastrophically low.”

Monday’s move signals that PSU is learning from budget cut missteps the institution made during the 2024-25 school year.

Some faculty whose jobs were cut last school year were recently reinstated after an independent arbitrator found the university did not follow the correct layoffs procedure outlined in the PSU-AAUP contract.

But Cudd’s announcement Monday cited the use of retrenchment, a different procedure. This method is a drawn-out process that allows for layoffs when the university experiences certain, extreme financial duress.

A finalized layoffs announcement from the university is still at least two months away.

PSU isn’t the only higher education institution in the state struggling to balance its budget this school year. Nearly all of the state’s public universities have announced shortfalls and plans to fill them. That includes Oregon State University, which didn’t reach enrollment projections for the first time in years last fall.

Southern Oregon University’s financial woes are existential. SOU leaders recently announced it would not be able to cover its payroll by February 2027. But the Ashland-based university recently got a $15 million bailout from state lawmakers in the short session.

Knight believes PSU could have done more to advocate for additional state funds from legislators too. If university leaders had also asked for emergency dollars, he said, the institution might not be in the situation it’s in now.

“We can pause, hold off on the worst of these proposed cuts and work together to lobby for long-term funding to engage in the growth that we need at PSU,” Knight said.

Cudd said her announcement marks the beginning of a process that will heavily involve campus input and give the faculty union a chance to propose alternatives. She emphasized that university leaders are far from making any final decisions on layoffs and program cuts.

News Source : https://www.opb.org/article/2026/03/09/portland-state-university-cuts-layoffs-retrenchment/