The city is staring down the barrel of a nearly $1 billion budget shortfall, prompting what Mayor Karen Bass bills as a “fundamental overhaul of city government” that will include 1,647 layoffs and the elimination of more than 1,000 vacant positions across the city government.
Bass addressed the dire budget outlook during her State of the City address April 21, calling for the reorganization of city departments to streamline efficiency and expedite service delivery. “This is a broken system, and to turn L.A. around, we have to fix this,” she said.
“My proposed budget, unfortunately, includes layoffs, which is a decision of absolute last resort,” Bass said.
The $800 million deficit was attributed to a confluence of crises, including the loss of property tax revenues caused by devastating wildfires; an ongoing exodus of the film industry to other, more business-friendly states; and the trade uncertainty surrounding the Trump administration’s tariff policies.
The mayor’s proposed 2025-26 budget would have a deep impact on the city’s Information Technology Agency (ITA), which would see its budget decrease by 13.55 percent over the previous fiscal year, dropping from $101.2 million to $87.5 million.
While city officials declined to comment on the developing budget, public documents paint a stark picture of what could lie ahead for the tech agency and its partners.
The cuts will primarily affect ITA’s communications services accounts, contractual services accounts, various expense accounts and 86 positions (54 staffed and 32 vacant), according to an April 22 letter from General Manager Ted Ross to the Budget, Finance and Innovation Committee.
“While we understand the importance of cost reduction measures citywide in this challenging year, the reduction would leave ITA lacking and unable to provide our core services successfully as currently proposed,” Ross wrote.
Without amendment, staffing would be reduced across the following ITA service areas:
- HR and Payroll Support — 10.4 percent staff reduction
- Applications Services Division — 32.1 percent staff reduction
- 311 Call Center — 32.8 percent staff reduction
- Web and Media Division — 11.5 percent staff reduction
- ITA Citywide Help Desk — 23.1 percent staff reduction
- Voice, Video and Data Communications — 19.1 percent staff reduction
- Communication Services — 13.9 percent staff reduction
- Enterprise Systems and Data Center — 16.7 percent staff reduction
- Finance, Administration and Internal Operations — 19.2 percent staff reduction
- Chief Information Security Office — 8.3 percent staff reduction
In his letter, Ross urged the committee to consider eliminating the vacant positions while retaining the 54 staffed positions, using a portion of the funding created to fund critical IT work.
“Unfortunately, these continued reductions on the already lean IT department do risk serious technology outages, department inefficiencies, poor constituent experiences, and service impacts to city departments, elected officials, and the public,” he wrote.
The situation creates a couple of considerations for private-sector partners: the first is impacts to existing contracts; the second is impacts to near- and long-term contracting opportunities; and lastly, will the city lean on the vendor community to help address service gaps?
The proposed budget would, in fact, send significant “painful” ripples through existing programs and contracts. Among the exceptions Ross advocates for are: $1.1 million for contractual services for the city’s Financial Management System through vendor CGI; $270,000 for critical endpoint protection software licenses; $400,000 to fully fund licenses for the MyLA311 system; $750,000 for the Okta Workforce Identity Cloud solution; $7.7 million for critical radio and obsolete equipment replacement, among several other critical requests.
Ross noted that in the case of the Financial Management System, the loss of funding through the expense accounts would require either a renegotiation of the contract or outright cancellation.
“Regrettably, the financial conditions at the city of Los Angeles have resulted in a proposed budget that would dramatically reduce the size and capabilities of the ITA at a critical junction in technology and the needs of our residents,” Ross wrote.
The full letter outlining ITA’s suggested alterations and potential impacts can be found here.
The Budget and Finance Committee is holding hearings about the proposed budget, though ITA was not among the departments scheduled for May 1. According to the schedule posted by the committee, officials will review the remaining city departments May 5.
