US universities and research institutes will remain in stable financial health despite federal budget cuts, but staff reductions are likely, says a report by Moody's Investors Service, an international credit-rating agency based in New York. In The Sequester Series: Limited Impact on US Universities and Related Not-for-Profit Organizations, published on 28 March, the agency notes that universities and research institutes will see an overall 5% cut in federal funds this year. The report is meant to reassure investors in the higher-education sector, but says that lay-offs, mainly of non-tenured researchers, could be needed to manage the cuts. Institutions are likely to increase their focus on interdisciplinary research and extramural collaborations to increase revenue and share costs, says Edith Behr, vice-president of Moody's.