San Francisco issues 127 layoff notices as $643 million deficit looms

At Laguna Honda Hospital and Rehabilitation Center, all four clinical nurse specialists received layoff notices, a sign that San Francisco’s budget crisis had reached the bedside before City Hall finished closing the books.

Mayor Daniel Lurie’s administration issued 127 layoff notices across 18 departments around April 6, with some workers getting 30-day notices and others 60-day notices. Officials have said the notices are the first wave of a broader effort that could total as many as 500 city job cuts over the next two months, while about 2,000 vacant positions are being frozen as well.

The scope matters because the cuts are spreading across the parts of city government residents touch most often: the San Francisco Department of Public Health, the Human Services Agency, the Office of Economic and Workforce Development, the San Francisco Police Department and city administration. When nurses, caseworkers, workforce staff and other front-line employees are removed from those systems, the result is not just a smaller payroll. It is likely to show up as thinner staffing, longer waits and slower response times for people trying to get help from the city.

The layoffs follow the city’s March 31 budget outlook update, which projected a two-year General Fund shortfall of $642.8 million for fiscal years 2026-27 and 2027-28. That was an improvement from an earlier forecast of roughly $936.6 million, helped by stronger hotel, sales, transfer and business tax collections, higher hospital revenue and lower pension costs. Even so, the deficit remains large enough to force immediate cuts.

Lurie had already framed the squeeze months earlier, when he proposed a $15.9 billion budget for fiscal years 2025-26 and 2026-27 and said it would close an $800 million deficit. The current round of notices shows how that plan is being translated into day-to-day decisions inside City Hall, with department heads choosing where to absorb pain and which programs can no longer be shielded.

Labor leaders are moving quickly to fight back. SEIU Local 1021 said the layoffs hit all four clinical nurse specialists at Laguna Honda and warned that clinics and essential services could be affected. Union leaders, including those with IFPTE Local 21 and the San Francisco Building & Construction Trades Council, are urging the city to consider alternatives, including new revenue measures such as Proposition D, before cutting more staff. For now, the message from City Hall is that more notices may be coming, and San Francisco’s fiscal repair is already reshaping how the city works.