Dallas city manager warns layoffs are coming as budget shortfall grows

The City of Dallas is warning employees that a significant budget shortfall will lead to layoffs across multiple departments.

City Manager Kimberly Tolbert delivered the message in a video posted Friday, telling staff the city has entered a period in which "change is the new normal."

Tolbert said rising costs, shifting resident expectations, and rapid technological change are forcing Dallas to rethink how it operates. She said part of becoming more efficient involves embracing AI, as many private‑sector companies are doing.

She said the city's traditional revenue patterns are no longer keeping pace with spending.

"Why costs are rising faster than revenue?" Tolbert said. "Property taxes and sales taxes are not increasing proportionally. The city relies heavily on those two revenue sources to fund essential services, such as maintenance infrastructure, police services, homeless programs, park and recreation, housing, traffic management."

She said residents have asked for more investment in those services, widening the gap between income and demand and putting pressure on fixed costs such as salaries, pensions, and employee health benefits.

Tolbert also highlighted the speed of technological change.

"Managing rising costs and increased demands force hard decisions and choices. The pace of change isn't slowing. It's at a racecar speed. That means we live in a new environment where we must look at ways to be more efficient and do things differently."

She added that "there are no sacred cows in this process," saying any program or workflow that no longer serves residents well must be reconsidered.

Tolbert acknowledged the human impact of the looming job cuts.

"These decisions are challenging because it's not about positions. It's about people. And I know that behind every line item is a person, it's a family, and it's years of dedication to this organization."

She said the city will treat affected employees "with dignity, compassion, and respect," and that programs are in place to help them transition to new opportunities.

Tolbert will hold employee budget town halls on Aug. 10, where staff can ask questions directly. She closed her message by thanking employees for their service.

"The strength of this organization has never been found in a budget document. It's found inside the people who show up every day to serve Dallas."

The city has not yet said how many jobs will be cut.