San Francisco Mayor Initiates Layoffs Amid Budget Crisis

On April 6, 2026, San Francisco Mayor Daniel Lurie issued 127 layoff notices to city employees across 18 departments, marking the first phase of a broader initiative to eliminate a total of 500 positions. This decision comes in response to a projected budget deficit of $643 million over the next two years, exacerbated by significant cuts in federal and state funding, particularly due to the impact of President Donald Trump's Big Beautiful Bill, which has severely reduced local healthcare funding.

The departments affected by the initial layoffs include the city administrator’s office, the Department of Public Health, the San Francisco Police Department, the Office of Economic and Workforce Development, and the Human Services Agency, among others. In addition to the layoffs, the mayor's office has frozen approximately 2,000 vacant positions as part of its cost-saving measures.

Mayor Lurie's approach to layoffs this year contrasts sharply with his previous strategy in 2025, when he announced around 150 layoffs that were ultimately reduced to about 40 after negotiations with the Board of Supervisors. This year, Lurie has opted for earlier layoffs to maximize savings and mitigate future budgetary challenges. He stated, “Facing a budget deficit that will rise to $1 billion, alongside significant cuts in federal and state funding, we have a choice: take action now or be forced to do twice as much in the coming years.”

The announcement of layoffs has drawn strong condemnation from public-sector unions, including SEIU 1021 and IFPTE Local 21. These organizations are actively opposing the cuts through their Overpaid CEO Tax measure, which is set to appear on the June 2 ballot and could potentially raise around $200 million for the city’s general fund. The unions argue that the layoffs will negatively impact essential services and the livelihoods of city workers.

If the full 500 employee cuts are realized, this would represent a 1.5% reduction of San Francisco's workforce, which currently stands at approximately 34,000 employees. The mayor's office emphasizes that these measures are necessary to ensure the city can manage taxpayer dollars effectively and continue to provide essential services to residents.

The second phase of layoffs is anticipated to coincide with the release of Mayor Lurie's proposed budget at the end of May or early June. As the city navigates its fiscal challenges, the outcome of the Overpaid CEO Tax measure will be closely watched as a potential source of revenue to alleviate some of the financial pressures facing San Francisco.