Full Breakdown
Denver City Faces Major Layoffs Amid Budget Crisis
8/20/2025, 2:58:08 PM
Overview of Layoffs and Budget Deficit
The City of Denver has announced significant layoffs affecting 171 employees as part of a strategy to address a projected $200 million budget deficit for 2026. In addition to the layoffs, the city will eliminate 665 vacant positions and shift 92 jobs to alternative funding sources. These measures are expected to save approximately $100 million, which will cover about half of the budget shortfall.
Context of the Budget Crisis
Mayor Mike Johnston attributed the budget crisis to an economic slowdown, which has resulted in stagnant sales and use tax revenues—key components of the city's general fund. The city has not experienced such low revenue growth in over a decade, leading to increased scrutiny of personnel costs, which account for nearly 70% of the general fund budget. Johnston noted that the city had anticipated some revenue decline but did not foresee the extent of the current shortfall.
Layoff Process and Employee Impact
The layoffs will be executed based on a formula considering employees' years of service, skills, and performance. Affected employees will receive 30 days of paid administrative leave, severance packages ranging from two to eight weeks based on tenure, and continued health benefits through September 30. However, the layoffs have sparked significant anxiety among city workers, many of whom have expressed concerns about the impact on city services and their livelihoods.
Scott Gilmore, a long-time manager in the Department of Parks and Recreation and husband of Councilmember Stacie Gilmore, was among those laid off. He criticized the lack of transparency in the layoff process and suggested that his termination may be linked to his wife's vocal opposition to the mayor's administration. Stacie Gilmore expressed her dismay, stating, "I feel like today, there was retaliation for me being a very outspoken critic of Mayor Johnston's administration."
Criticism and Opposition
The layoffs have drawn criticism from several city council members, including Sarah Parady and Shontel Lewis, who have called for greater transparency and alternative solutions to layoffs. Parady emphasized the need for collaboration with the administration to explore other options, such as early retirement incentives. Union leaders, including Michael Wallin, president of AFSCME Local Union 158, have also voiced their discontent, arguing that the city should have considered other cost-cutting measures before resorting to layoffs.
Official Statements
Mayor Johnston acknowledged the difficulty of the decision, stating, "This has been the hardest leadership task I probably ever had to undertake." He emphasized the city's commitment to maintaining essential services despite the cuts, asserting that the layoffs were a necessary step to ensure the city's financial stability.
What's Next
The city plans to release a detailed breakdown of the layoffs by department later this week. Mayor Johnston is also expected to present the proposed budget for 2026 on September 15, which will outline further financial strategies to address the ongoing budget challenges.
Conclusion
The layoffs represent a significant shift in Denver's approach to managing its budget amid economic pressures. As the city navigates this crisis, the impact on employees and public services remains a critical concern for both city officials and residents.
