New Orleans is entering 2026 with a major shake‑up at City Hall, as Mayor‑elect Helena Moreno begins implementing a sweeping restructuring plan that includes layoffs, furloughs, and the consolidation of several departments. The changes come as the city faces one of its most difficult financial periods in years, with a projected budget deficit looming over the new administration.
A Budget Crisis Years in the Making
According to reporting from Axios, the New Orleans City Council is preparing to approve Moreno’s 2026 budget, which she describes as only the first step in stabilizing the city’s finances. The city is confronting what Moreno calls the consequences of “complete mismanagement of the budget over the past couple of years,” a situation that has forced deep cuts across agencies.
WGNO reports that Moreno’s proposed budget includes about $150 million in spending reductions, a hiring freeze for most vacant positions, and significant workforce changes designed to prevent a projected $222 million deficit.
Who Is Losing Their Jobs
Some layoffs will take effect immediately in the new year. WWL‑TV reports that unclassified employees in the Mayor’s Office of Youth and Families and the Office of Criminal Justice Coordination have already been notified that their positions will end on January 12, 2026. Both offices will be eliminated as standalone departments.
Additional workforce impacts include:
• 36 unclassified positions under the mayor’s control being cut
• 62 probationary employees being laid off across multiple departments
• A hiring freeze on 134 vacant positions, excluding public safety roles
• 724 employees facing a one‑day furlough each pay period
Moreno’s transition team has indicated that more layoffs may follow as the administration continues evaluating departments.
Where the Work Is Moving
The restructuring does not eliminate the services provided by the affected offices. Instead:
• Youth and family programs will move under Health and Human Services
• Criminal justice coordination will be split between Health and Public Safety departments
Moreno argues that these consolidations will “create better workflows” and save the city millions in administrative costs.
Public Safety and Essential Services Protected
Despite the cuts, Moreno’s $801 million budget proposal maintains full funding for:
• Police
• Fire
• EMS
• Sanitation
The New Orleans Police Department will eliminate 11 positions tied to the now‑lifted consent decree, while the Fire Department will cut two non‑firefighter roles.
Fees, Cars, and Overtime Also Under Review
City leaders are also looking at revenue and operational changes to help close the gap:
• Towing fees may increase to the state average of $142
• Sanitation fees may rise for the first time since 2011
• Travel budgets will be cut to 25% of current levels
• The number of take‑home vehicles for non‑emergency personnel will be reduced
Overtime spending—long a budget pressure point—will be capped and centrally monitored.
A Difficult Start to a New Administration
The layoffs mark a tough beginning for Moreno’s term, but her team insists the moves are necessary to rebuild the city’s financial stability. Employees whose positions are being eliminated have been encouraged to apply for other roles within the reorganized administration.
With more evaluations underway and additional cuts possible, 2026 is shaping up to be a year of significant transition for New Orleans’ government workforce.