The news came in an internal memo from EDD Chief Deputy Director Sharon Hilliard earlier this month that employees forwarded to The State Worker. A department spokeswoman verified the authenticity of the memo and said that downsizing will eventually affect some customer services.
Hilliard said the Congressional sequestration spending reductions and ongoing underfunding of the Unemployment Insurance program by the federal government translates into a more than $150 million budget shortfall for the department through June 2015.
"While we have been faced with such shortfalls before in the EDD's history, never has our shortfall been so large," Hilliard said in the memo. In response, the department is doing everything from cutting phone service hours and moving staff to more dependably-funded programs to squeezing operational spending and limiting overtime.
"With less federal money available to support staffing in UI programs, we strongly encourage staff to explore other employment opportunities within EDD that don't rely on UI funding," Hilliard's memo says, "such as Disability Insurance and Workforce Services, or with other state agencies."
With the economy recovering from the recession, demand for unemployment benefits is coming down, said EDD spokeswoman Patti Roberts. In the second quarter of 2013, UI claim numbers decreased 37 percent compared to the same three-month stretch at the height of the recession in 2010. (Demand is still 116 percent higher than the same period in pre-recession 2007.)
"And when you couple that with an unprecedented shortfall in our federal UI funding," Roberts said, "we have a situation where we cannot maintain staffing levels and services to the point needed to keep up with demand."
EDD's call center workers have been answering more calls and hold times have been declining, owing to a reorganization of the department's business operation, "however, over time we anticipate call center service levels to decrease given EDD continues to lose staff every day," she said in an email, "and will not be backfilling positions given the UI funding shortfall."
Here's Hilliard's memo: