As many as 1,226 employees could lose their jobs if the San Francisco Municipal Transportation Agency continues its layoffs next fiscal year as the company faces an extended budget deficit and is left with few other alternatives other than cutting about 22% of its workforce.

A combination of the coronavirus pandemic, stay-at-home orders, and economic recession forced the transit agency into severe financial disadvantages. Officials saw a decline of 95% on its fares and about a 50% cut on its parking fees and fines. The company had already cut $118 million by freeze-hiring and cutting back on operational and service costs.

The transit agency is faced with a $68 million budget deficit coming into the next fiscal year, and executives expect it to rise to $168 million by the next fiscal year. The company’s ridership and revenue are unlikely to recover soon. The situation leaves executives with few other options and forced them to consider last-resort alternatives such as layoffs and service cuts.

During a press conference on Tuesday, San Francisco Mayor London Breed said, “This is the reality we have to confront. We are facing the gutting of a basic city service that our residents rely on.” She added thousands of employees, including bus drivers, mechanics, and other workers, are at risk of losing their jobs and livelihoods.

On Monday, leaders of the transit agency detailed the grim situation of the company to their staff during a presentation and explained the same dire circumstances to its Board the next day. Officials are expected to layoff between 989 and 1,226 of their workforce coming into the next fiscal year. The agency could also start laying off jobs this fiscal year, resulting in a loss of between 226 and 504 workers.

On Monday, SFMTA Director Jeffrey Tumlin said the agency had done all that it could to keep itself afloat amid the pandemic. He urged colleagues to work together to find a solution to the staggering budget deficit that threatens their workforce.

Additional layoffs could extend service cuts far beyond the 30% service hours reduction that the agency has experienced since the beginning of the COVID-19 crisis. Low-income, disabled, and elderly people who heavily relied on the transportation service said they have already been affected drastically by the previous cutbacks.

This year, the agency spent $373.8 million worth of federal relief funds from the CARES Act to curb service reductions and layoffs. However, the financial assistance is set to end in December as additional funding is not guaranteed. Breed expressed her hopes that the incoming Biden administration would be able to provide emergency assistance to transit systems within the nation.

Starting in January, the Bay Area’s Golden Gate Bridge, Highway and Transportation District is scheduled to layoff 146 of its workers, 88 of which are bus drivers; BART is reducing service operations in February and is giving employees an option of a retirement package to avoid layoffs. On Monday, Washington D.C. said it could potentially layoff workers and explained the difficult situation of the transit community, the San Francisco Chronicle reported.

Tumlin said SFMTA executives are still discussing who will be laid off and when as the entire process involves several labor unions, Board, and city officials. He added that immediate decision is needed to cut back on the number of jobs being removed.

The president of the Transport Workers Union Local 250, Roger Marenco, said workers who are most threatened by the potential layoffs are low-income and blue-collar workers. He said losing their jobs, and health care benefits during the pandemic is a severely frightening possibility.

Marenco said, “I refer to operators as the lifeblood of San Francisco,” adding without their service, the city would not be able to move and operate freely. The official noted that if layoffs continued, they would not be applied immediately, and workers would be given at least the next 60 days to plan their next course of action.