New School Lays Off Nearly 90 Trying to Cut $50 Million Deficit

The New School, the renowned arts and design university based in Greenwich Village, has laid off nearly 90 faculty and staff members as it struggles to close a multi-million dollar budget deficit. Several of its component colleges are also being shut down and consolidated.

The latest layoffs amount to about 6 percent of its total staff and another nine percent have opted for voluntary buyouts, a total staff reduction of 15 percent according to a report in the Chronicle of Higher Education.

At least 19 of the laid off workers are full-time faculty members who teach at the Eugene Lang College of Liberal Arts and the New School for Social Research, and 68 were staff that included library and clerical staff, according to reporting first done by the New School Free Press, a student-run news organization at the university. Ten of the laid off professors are reportedly tenured.

The New School reported revenue of $588 million and expenses of $639 million in 2024, the most recent year for which tax filings were available, leaving the university with a $51 million income deficit, according to filings compiled by the Non-profit Explorer of Pro Publica. The school Provost Richard Kessler said in an interview with ARTNews that the school “had been running a $50 million [annual] deficit and a $160 million accumulated deficit that it could not continue.” The university had not returned our calls seeking comment by press time.

He also said in the same report that the university has 20 percent fewer students than it had in at its peak in 2021 and the immigration policies of the Trump administration had curtailed enrollment of foreign students, who made up to 40 percent of the student body.

An insider at the university told Straus News that the layoffs are the latest in a series of crises The New School has faced since the COVID pandemic, during which the university struggled to renegotiate the adjunct faculty’s labor contract. As part of the adjunct faculty negotiations, The New School then reportedly brought in an outside anti-union advisor, leading to a strike and rising mistrust in university leadership, even after a new contract that appeased both parties was written up. Additionally, the source told Straus News that recent protests and activism relating to the Israel-Palestine war at the university has led to police face-offs, student walkouts, and a slew of unhappy parents. For the current layoff crisis, which serves as an added intensifier for the school’s environment, the source also highlighted the lack of a large endowment that other U.S. universities can employ to mitigate some of the financial struggles impacting to universities nationally.

The layoffs were reportedly implemented June 8, and included a six months’ notice, where employees will work until termination in December or else be allowed to immediately resign. Prior to the formal HR notices, some departments had informed employees in private meetings in the week preceding.

The student body numbers just under 7,000 students, according to the Best Colleges report by US News & World Report, which ranked the university as #213 among national colleges.

The university had been comprised of six schools, including the Parsons School of Design. As part of the restructuring it is planning to consolidate into only two schools, and has discontinued over a dozen academic programs, according to a report in the Chronicle of Higher Education. It has nine unions that represent some of its employees. After the layoffs, The New School’s chapter of the American Association of University Professors (AAUP) blasted the layoff moves.

“These firings, along with coerced “voluntary” separations, early retirements, and step-downs since December 2025, constitute a major gutting of our full-time faculty body across multiple divisions,” the local chapter of AAUP wrote in their statement. “To be clear, faculty were not fired on the basis of job performance.”

“These firings disproportionately impact faculty–and, correspondingly, students–in the humanities and the social sciences,” added the local chapter of the AAUP.

The layoffs come after a year of large restructuring due to financial austerity measures at the school. Many faculty were moved into new departments as programs were dissolved, coalesced or discontinued, according to a May 22 Faculty Senate motion.

AAUP TNS said the layoffs were not a response to faculty actions and that the decision will have large consequences for certain departments.

In a post made on Bluesky, a social media platform, AAUP TNS further described how many of the faulty fired included “tenured faculty of color, and multiple staff members, including in social justice.”

ACT-UAW Local 7902–one of the unions representing The New School employees–echoed the AAUP and said the university should not have prioritized financials over the livelihoods of its employees and students.

“It is a great irony that the New School, known worldwide for its longstanding commitment to social justice, is at the forefront of the alarming trend in U.S. higher education towards gutting academic freedom and shared governance, destroying the protections of tenure, and hollowing out intellectual and creative practice in favor of the dictates of the bottom line,” AAUP wrote.

The school had been taking measures to cut its deficit including listing the townhouse used by its president for $20 million in 2024. The price for the four-story, 4,000 sq. ft town house at 211 W. 11th St. was eventually cut nearly in half a year later when it sold for $10.3 million, according to Crain’s. The school had purchased in for $990,000 in 1984.

The yawning deficit in 2024 had increased over $40 million from 2023 in which it reported a deficit of $10.9 million.

In 2024, the university reported it spent over $210 million on salaries and wages, and over $8 million on executive compensation. Donna Shalala, who served as interim president of The New School from 2023-2024, earned a salary from the university of just over $300,000 during her tenure.

Currently, The New School’s undergraduate tuition and fees for new students entering Fall 2026 is $61,208 according to the Best Colleges edition of US News & World Report, but it gives out an average of $40,412 in need based aid.

The school was founded in 1919 by a small group of prominent American intellectuals and educators “who were frustrated by the intellectual timidity of traditional colleges,” according to the school’s web site.