Los Angeles is facing a financial crisis, with a projected budget shortfall of nearly $1 billion for the 2025-26 fiscal year. City Administrative Officer Matt Szabo has advised the City Council to implement stringent cost-cutting measures, including possible workforce reductions. Contributing to the shortfall are escalating legal payouts and disappointing tax revenues, further strained by impending raises for city employees, costing an additional $250 million. Szabo warned that layoffs could reach into the thousands, necessitating immediate actions, as Mayor Karen Bass prepares to propose a budget solution by April 21.
"The severity of the revenue decline, paired with rising costs, has created a budget gap that makes layoffs nearly inevitable," he said. "We're not looking at dozens or even hundreds of layoffs, but thousands."
"Because of the severity of the gap we are facing, the mayor has made it clear we need to take action now," Szabo told the council.
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