Thousands of U.S. public-school employees have received layoff warnings as the nation鈥檚 education system grapples with mounting financial pressures.
Reductions have been looming for months, in what some officials describe as the largest wave in more than a decade. Leaders at seven of the nation鈥檚 10 largest school districts have said they鈥檙e looking to reduce staff to balance budgets.
Nearly 660 positions in the Los Angeles Unified School District were cut. Chicago鈥檚 system is targeting reductions, while the district serving the Las Vegas area is eliminating around 700 roles. Districts in Florida鈥檚 Broward, Palm Beach and Orange counties and Houston鈥檚 system are facing similar stress, as are Boston, Cleveland, Milwaukee and Philadelphia.
Officials say the strains have intensified as they reckon with sinking enrollment, rising labor and material costs, and the expiration of pandemic-era federal aid. Many had tapped those funds to boost hiring, driving a surge in local governments鈥� educational staffing. Now, they鈥檙e being forced to whittle those numbers back.
鈥淭hese are all things that are really coming to a head that is really making this time very challenging, not only for our system, but a lot of urban systems across the country,鈥� said Warren Morgan, chief executive officer of Cleveland Metropolitan School District, which is poised to let go of roughly 400 employees.
The cuts the district carried out at the end of the school year were the first since 2011, he says, and the system is closing or merging 29 of its 93 schools. Enrollment has plummeted by around half in the past couple decades, to about 34,000 students.
In Nevada鈥檚 Clark County, about 700 employees lost their positions due to budget reductions as the district grapples with declining enrollment and the end of pandemic-era stimulus, said Superintendent Jhone Ebert. The district is trying to find new roles for them, but at least 60 teachers, social workers, and counselors will lose their jobs, she said. The district has about 288,000 students, down roughly 37,000 from a 2018-2019 peak.
鈥淢any of our principals who鈥檝e been in the role for maybe five to 10 years, they have never had to experience something like this,鈥� said Jesse Welsh, a deputy superintendent.
The warnings highlight deepening fiscal strain, particularly as enrollment鈥攚hich determines funding鈥攑lunges. The U.S. birth rate has declined since 2007, shrinking the pool of school-age children. The growing momentum behind school choice, including in some of the biggest states, is also playing a role, as is the federal government鈥檚 immigration crackdown.
The number of public-school kids dropped by 1.2 million, or about 2%, from 2020 to 2022, according to the National Center for Education Statistics, which projects an additional 5% tumble from that year鈥檚 level by 2031. That would mean a further decline of around 2.7 million students.
Budget season
Layoff notices don鈥檛 necessarily translate into job losses. For example, a spokesperson for Los Angeles Unified said the final number of staff let go will likely be significantly lower because of attrition and reassignment based on seniority. It鈥檚 a similar dynamic for other systems around the country.
Reductions typically aren鈥檛 carried out until school budgets are finalized. Most districts start their fiscal years on July 1, so budgets and staffing levels must be adopted by then.
鈥淲e haven鈥檛 seen this much mention of job reductions in 15 years, since the aftermath of the last recession,鈥� said Marguerite Roza, director of Edunomics Lab, which researches education finance and tracks local news on school finances.
Research shows that student achievement suffers as a result of teacher losses, particularly for students of color and those from low-income backgrounds, according to Matthew Kraft, a professor of economics and education at Brown University. The wave comes as national assessments show students continue to struggle in reading and math.
Meanwhile, public-education staffing soared following a dip during the pandemic, when many schools went online. Local-government education payrolls are at an all-time high of almost 8.3 million positions, about 200,000 above March 2020 levels, federal data show.
Chicago Public Schools added about 10,000 positions since 2019 to help students rebound from the pandemic, said Superintendent and CEO Macquline King. Meantime, enrollment has slumped by 45,000 students, to about 316,000 at the start of this past school year.
鈥淲ithout federal pandemic aid to fund these positions, it has become extremely difficult to maintain the status quo,鈥� King wrote in a May memo. CPS faces a shortfall of about $733 million for the coming school year, which has swelled because of the end of that temporary relief, among other pressures.
Because salaries and benefits are schools鈥� biggest expenses, those are typically the areas cut when deficits emerge.
Some districts are grappling with financial pressure even as they鈥檙e looking to hire.
New York City, the nation鈥檚 biggest system, with roughly 900,000 students, isn鈥檛 filling certain vacancies as it moves to trim $149 million in expenses, although it鈥檚 adding teachers to meet a mandate for smaller class sizes, according to the mayor鈥檚 proposed budget.
In Milwaukee Public Schools, with over 60,000 pupils, Superintendent Brenda Cassellius has a plan to close a $46 million shortfall.
She鈥檚 cutting more than 260 positions, mostly administrative roles including assistant principals. With those savings, she鈥檚 seeking to hire 150 teachers and 138 paraprofessionals to lower class sizes in early grades.
鈥淲e have about 91% of our students who are not yet scoring proficient on grade level in literacy,鈥� she said. 鈥淲e have to do something.鈥�
She hopes as many as 100 of the laid-off administrators will take classroom roles.
Debt stress
All these forces are hurting the credit of school systems that issue debt to finance infrastructure. About a third of districts graded by S&P Global Ratings had operating deficits in 2024, compared to 17% in 2021, while negative ratings or outlook revisions soared 40% in the year through June 2025.
Investors who follow the bonds look for districts whose leaders make tough choices to balance budgets.
When school credits weaken on such stress, it offers a chance to pick up additional yield in the sector, says Jennifer Johnston, a senior vice president at Franklin Templeton. She expects more of those scenarios.
鈥淎s enrollment comes down, we would expect to see teacher layoffs, and we would expect to see school closures,鈥� she said. 鈥淭hey go hand-in-hand.鈥�
