In a follow up to this story, Virgil Renzulli (VP of Public Affairs here at ASU) has this to say:
At ASU, as at most American research universities, positions funded by external grants are completely dependent on that funding. Robert Pettit, former director of the university’s Cancer Research Institute (CRI), attempted to secure funding to continue his research, submitting proposals to both the National Cancer Institute and the National Oceanic and Atmospheric Association, but these were not selected by those agencies from among the many competing proposals. That is the sole reason why 22 staff and seven students working on Pettit’s research team (not 60 individuals as Djerassi indicates) had to be reassigned or released.