Los Angeles Unified is racing toward a rescheduled February 2026 vote on sweeping reductions-in-force, with the district up against the March 15 statutory deadline to notify employees of potential layoffs. At the center is a roughly 200 million dollar budget hole colliding with previously negotiated, phased wage increases that are still rolling out. Superintendent Alberto Carvalho has framed the cuts as part of a broader “fiscal stabilization” effort, arguing that without decisive action the district’s finances will deteriorate further, a warning echoed in LAUSD’s own fiscal documents.
The Growing Budget Shortfall
In January 2026, Los Angeles Unified’s latest fiscal updates projected that the district is heading into a roughly 200 million dollar deficit, driven by declining enrollment and weaker than expected state revenue. District staff have pointed to the erosion of prior reserves that once topped 500 million dollars, explaining that those one-time cushions have now been largely depleted and can no longer absorb structural shortfalls. That gap is surfacing just as the district confronts ongoing cost pressures for salaries, benefits, and programs that were expanded when revenue looked stronger.
State projections for the General Fund help explain why LAUSD’s revenue expectations are tightening. An analysis by the Legislative Analyst’s Office describes how slowing state tax collections are squeezing the General Fund and limiting the cost-of-living adjustment built into the Local Control Funding Formula, with the LAO citing a 3 percent COLA assumption for 2024-25 that is lower than earlier boom-year increases. The California Department of Education’s fiscal oversight data, which tracks districts under financial strain across the State, identifies LAUSD as operating under stress conditions that require close monitoring, placing the district’s looming layoffs within a broader statewide pattern of budget pressure.
Impact of Recent Teacher Salary Increases
The budget hole is colliding directly with the pay raises LAUSD agreed to in its 2023 contract with United Teachers Los Angeles. That deal granted a 21 percent wage increase over three years, with an 8 percent raise applied immediately, another 4 percent scheduled for 2024-25, and a final 9 percent in 2025-26, according to major reporting on the UTLA contract. Public data cited in that coverage show the average teacher salary rising above 85,000 dollars, a figure that has become a flash point in debates over whether LAUSD can sustain what critics describe as “huge salaries” while cutting jobs elsewhere in the system.
UTLA has defended the 21 percent package as fair compensation in a high-cost region and has argued that competitive pay is necessary to attract and retain qualified educators. Union leaders have framed the raises as catching up after years of stagnant wages, insisting that classroom staff should not be blamed for a deficit driven by enrollment losses and state funding volatility. That argument collides with the district’s fiscal narrative, in which the phased increases are a major driver of rising ongoing costs even as the revenue base softens, leaving LAUSD to weigh how many positions must be eliminated to keep future budgets in balance.
Planned Layoffs and Cost-Saving Measures
The most immediate flashpoint is a reduction-in-force plan that district officials say is aimed at saving more than 100 million dollars. According to accountability reporting on LAUSD’s budget committee, the proposal targets more than 1,000 positions, including central office roles, “unfunded” jobs that rely on expiring dollars, and staffing tied to the Student Equity Needs Index, known as SENI. Superintendent Carvalho and the district’s chief financial officer have both described the package as part of a fiscal stabilization plan, while acknowledging that the precise number of employees ultimately affected remains uncertain until the board takes a formal vote…