Facing a nearly $1 billion budget shortfall, Los Angeles Mayor Karen Bass has proposed laying off 1,600 city workers in the 2025–26 fiscal year, a move she described as a last resort during her State of the City address on Monday.

“You are the city’s greatest asset,” Bass told municipal employees last week. “But I want to be straight with you. My proposed budget – unfortunately – includes layoffs, which is a decision of absolute last resort.”

While police and fire departments will be shielded from the cuts, civilian positions across other departments are expected to be impacted.

The proposed $13.95 billion budget comes amid mounting fiscal pressures, including liability payouts, rising labor costs, and weaker-than-expected tax revenues. The city’s general fund is projected at $8 billion, falling short of the $8.14 billion estimate. Liability settlements tripled to $300 million this year, while labor contract increases added $259 million to city expenses.

Bass’ proposal also calls for eliminating 1,074 vacant positions, deferring capital projects, consolidating four city departments, and reducing the mayor’s own office budget. Although slightly reduced, spending on homelessness remains a priority.

SEIU Local 721 President David Green, whose union represents 10,000 city workers, pushed back strongly.

“Show us the money, we want to look at the numbers and look at every single dollar, this shouldn’t be the first-place people go, to lay off city workers, providing valuable city services,” he said.

In response to the crisis, Bass plans to lobby the California Legislature in Sacramento for additional funding to help close the gap.