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On the brink of looming insolvency, Los Angeles Unified could have prevented its financial crisis by leaving vacated positions empty, making thousands of district employee layoffs unavoidable to address a $3.6 billion deficit, a top state fiscal watchdog said. 

鈥淭hey’re overstaffed significantly,鈥� said Michel Fine, CEO of California’s Fiscal Crisis and Management Assistance Team of the Los Angeles school district. 鈥淥ur argument with them would be, ‘you should have started 鈥� a few years ago. Then attrition would have just taken care of the problem. Every time someone leaves, you shouldn’t be going out and replacing them. You should think through that.鈥� 鈥�

After authorizing layoffs for 3,200 non-teaching employees in February 鈥� including administrators and central office workers 鈥� just 657 were actually let go. And the $150 million savings from those cuts didn鈥檛 make much of a dent in overall spending. 

By delaying deep cuts, the district now faces even more job reductions. Its solvency plan includes a total 5,000 layoffs between 2027 and 2029 along with furlough days and changes to employee health benefit options, all of which must be negotiated with the district鈥檚 powerful labor unions. It鈥檚 unclear which employees could be laid off in the future.

Fine鈥檚 agency will help determine whether the nation鈥檚 second largest school district can independently carry out deep budget cuts, or face bankruptcy, county takeover or both.

In a seven-page July , the Los Angeles County Office of Education appointed a fiscal expert to work with the district and scolded officials for signing $1.2 billion in collective bargaining agreements earlier this year and drawing down from a fund for retiree health benefits, against the advice of its own fiscal advisor.

鈥淭he Board鈥檚 decision to override its own staff鈥檚 fiscal advice raises serious concern about the District鈥檚 willingness and ability to execute its financial stabilization plan with fidelity,鈥� the county wrote. 

Fine said he is optimistic that the district will be able to 鈥渇ix this problem and do it promptly,鈥� but not without significant staff cuts.

LAUSD school board member Tanya Ortiz Franklin, who represents Watts and parts of South Los Angeles, said the board should never have used one-time pandemic relief money to hire 6,000 new employees in 2021. Those funds expired in 2024.

But just two years after those hires the district issued a hiring freeze. In 2023, then-Superintendent Alerto Carvalho said that were also on the table to make up for lapsed relief funds.

鈥淲e ballooned our staffing when we had the resources to do so and we didn’t take the parallel process to close all of those positions,鈥� said Franklin, a former middle school teacher who was laid off during 2010 budget cuts. 

Now the number of proposed layoffs has grown. In June the board approved a plan to issue 5,000 pink slips in 2027 and 2028, Franklin said. 鈥淚t will be a challenge but necessary for us to actually issue all of those layoffs.鈥�

Staffing cuts will go a long way to correct the budget problems, Fine said. The district has a 鈥渞obust鈥� attrition rate, he said. With focused reductions the district should be able to 鈥渟olve the problem and move on.鈥�

鈥淭he board has to have the will to do it,鈥� he said.

Furlough days proposed in the district鈥檚 must be implemented by the Thanksgiving break in late November, according to the county鈥檚 letter, and layoffs must be formalized by January and in March. If fully executed, the plan would reduce spending by $3.6 billion.

The plan also includes school closures or reconfigurations for the 2027 and 2028 school years. Compared to cutting staff, which makes up 90% of the district鈥檚 budget, the savings from consolidating campuses is minimal 鈥� about $60 million over two years 鈥� but as the the district simply doesn鈥檛 need as many facilities, Franklin said.

The district serves more than 370,000 students from seven different cities across Los Angeles County 鈥� about half as many as were enrolled in 2018. The greater Los Angeles area is than other areas of California. Overall, state enrollment dropped 8% between 2015 and 2025, but the decrease in Los Angeles was more than 17%. 

鈥淚t’s a small piece of the bigger picture,鈥� she said, 鈥渂ut in my perspective, it is one that we need to take on because our physical campuses are too vast for the number of students.鈥�

School consolidations could take several forms, she said. The Diego Rivera Learning Complex in South Los Angeles, for instance, currently houses four small high schools with a total enrollment of about 2,000 students, each with its own administrative staff. Complexes like this one, she said, could be consolidated under one administration while other staff are laid off.

Schools with low enrollments could also be combined, Franklin said. In her district a number of elementary schools have less than 200 students 鈥� including Avalon Gardens, with 152 students, and Leapwood Elementary, with 179 鈥� and others that hover around 200.

鈥淚nstead of having three or four elementary schools, maybe we figure out as a community how to bring those campuses together,鈥� she said.

Another possibility would be to combine grades, either elementary and middle or middle and high school. This model, Franklin said, has the benefit of potentially staunching the flow of sixth graders who are leaving the district by building connections between middle school and other grades.

But none of these changes will be easy, she said, and all will require comprehensive coordination with the community.

鈥淗istorically we haven鈥檛 done a good job of doing school closures or consolidations,鈥� said Franklin. 鈥淚t鈥檒l come down to the eleventh hour and there is an outcry of emotions. I don鈥檛 want to get to that state this year.鈥� 

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