How Federal Funding Changes and Layoffs Are Transforming U.S. Science
March 21, 2025
By: Dharani Moorthy
In early February, scientists got the news they were dreading: the Trump administration planned to cap the “indirect costs” on research grants at 15%.
Already struggling with hiring freezes and uncertain budgets, this funding reduction for overhead costs was a sign of a brewing storm in the field of scientific research. One moment, institutions were flush with longstanding federal support. The next, they were bracing for mass layoffs and canceled studies.
A Shock to the System
A series of executive orders and sudden policy shifts following President Donald Trump’s inauguration have altered the course of scientific research in the United States. From the deliberate blocking of grant-review meetings and agency spending to laying off federal staff, many scientists believe that this is a crackdown on innovation and discovery. The effects of this siege are primarily seen through the nation’s two pillars of research funding, the National Institutes of Health (NIH) and the National Science Foundation (NSF).
Historically, the U.S. government’s investment in science has dwarfed that of any other country. The NIH alone, with an annual budget of around $47 billion, invested 25 times more than the next largest public biomedical funder in 2022, according to The World RePORT project. Meanwhile, the NSF channeled billions of dollars into research at 1,800 institutions across the nation, supporting roughly 350,000 researchers in everything from computer science to polar climate studies.
Starting on January 27, the Trump administration froze all payment on federal grants and loans in order to review government spending. While this prompted immediate legal challenges, NIH staffers described widespread confusion as crucial review meetings were suddenly delayed or canceled. Because federal law mandates that agencies must spend allocated funds by the end of the fiscal year or risk losing them entirely, the freeze threatened to torpedo countless research projects awaiting final approval.
However, it didn’t just stop with the grant funding. At the NIH, over 1,100 employees were dismissed, leaving many grant applications unprocessed. NSF employees faced a similar crisis. With its annual budget falling from $9-10 billion to around $3-4 billion, 10% of its workforce was fired in a single morning with rumors of a further 25-50% workforce reduction.
Targeting of Political Ideology in Science
While these budgetary changes have pushed the research world into a storm, a parallel push to reorient federally funded science has magnified the chaos. According to documents and audio recordings obtained by Nature, NIH employees have been directed to identify, and possibly cancel, grants supporting research on transgender populations and gender identity, diversity, equity, and inclusion (DEI) in the scientific workforce, as well as environmental justice. More specifically, NIH staff were instructed to categorize grants into four tiers based on the extent of DEI-related research. Projects that are solely or partially DEI-related face immediate renegotiation or outright termination.
The Trump administration has often conveyed that these actions are to minimize waste and fraud while increasing transparency in government spending. Furthermore, in a statement on February 11, U.S. Senate Commerce Committee Chairman Ted Cruz (R–Texas) argued that “DEI initiatives have poisoned research efforts, eroded confidence in the scientific community, and fueled division among Americans.”
Despite claims of wasteful spending by the Trump administration, many scientists argue that DEI efforts, global health initiatives, and women’s health research are anything but wasteful. Researchers warn that scaling back such programs not only undermines equity but also hinders creativity and global competitiveness, depriving science of the diverse viewpoints that power transformative discoveries. In the current state, however, scientists have lost funding mid-project, been forced to remove terms like transgender or diversity from grant proposals, and in some cases decided to leave the U.S. altogether.
Foreign Recruitment
As the U.S. struggles with these disruptions, other nations are seizing the chance to attract American researchers. An article by POLITICO reports that the Belgian Free University Brussels (VUB) and the French Aix-Marseille University have recently opened resources and funding for American researchers to relocate.
The article also reports that representatives from European nations such as France, the Czech Republic, Spain, and Germany have sent a letter to the European Commission to organize and welcome overseas talent that are facing government interference.
While the NIH has funded groundbreaking research into topics such as cancer immunotherapy, tuberculosis, malaria, HIV, and stroke, international institutions are eager to leverage the uncertainty in the U.S. to poach top scientists. This could potentially threaten the country’s decades-long dominance in biomedical research and innovation.
A Gloomy Outlook
For now, court orders and university pushback have slowed some of the Trump administration’s more drastic measures. However, it is uncertain how long this temporary stall will hold as the underlying threat of deeper cuts looms large.
Even if there is a light at the end of the tunnel, the U.S. scientific community faces a stark new reality. The growing ecosystem of competitive grants and robust support infrastructure has been knocked off balance. If the threats persist, scientists say the nation could lose its status as the global epicenter of innovation and biomedical discovery.
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