University leaders told ABC7News that they "face significant budget consequences from federal policy changes and those changes will cost Stanford $140 million."

The layoffs will come into effect from September 30.

It is still not clear which department will be hit by the layoff.

Stanford's president and provost stated in a letter to faculty and staff last Thursday as quoted by AB7News: "The university is making a $140 million reduction in the general funds budget for the upcoming year. This is the product of a challenging fiscal environment shaped in large part by federal policy changes affecting higher education...these are difficult actions that affect valued colleagues and friends who have made important contributions to Stanford."

According to reports, the Trump administration has reduced millions of dollars in research grants and higher education funding.

Professor Alex Fields of  Santa Clara University told the news channel: "Even though universities like Harvard, Stanford, and Brown have large endowments, most of these endowments are restricted to certain purposes. So, they don't have a great deal of flexibility. And the other thing, much of their assets would be difficult to liquidate quickly and be used for operating expenses."