City warns of potential layoffs due to federal funding delay

The city of Springfield is warning of potential layoffs due to a federal grant funding delay.

The city's Workforce Development division, part of the department of Workforce & Economic Vitality, may conduct a phased reduction of up to 11 positions, according to a news release this morning. The division has 33.5 full-time-equivalent roles. Overall, the city of Springfield has some 2,300 municipal employees, according to its website.

“You have to understand, those grants could go away at any time,” Springfield City Manager David Cameron told Springfield Business Journal in an interview shortly after the municipality made the possible layoffs public. “It’s tough to navigate the process; when grants disappear, you have to make those cuts to comply.”

Cameron indicated the workforce grant cuts may be the harbinger of future elimination of funding for both federal and state programs.

“In my opinion – my honest assessment – I think this is probably a warning sign of what’s to come,” he said. “I don’t think these programs are necessarily coming back.”

The layoffs would start with up to six employees by July 1 and an additional five by Oct. 1, according to the news release. The Workforce Development division is working with the city's Human Resources Department to try to find them positions elsewhere in the municipality.

"Like many federally supported programs and agencies, we are having to deal with the repercussions of what’s been happening on the national level,” said Amanda Ohlensehlen, director of Economic Vitality & Workforce, in the release. "For the Workforce Development division, the year 2025 was planned as a sustainability year to pursue replacement funding. However, a January 2025 federal funding freeze and extended FY26 federal budget negotiations delayed the release of new grant opportunities. The result was an unforeseeable operational disruption to federal grants that had a lasting impact on the release of potential funding."

The Workforce Development division administers more than $23 million in federal grants to support workforce training and economic mobility programs.

The release cited legislative delays in 2025-26 federal appropriations for discretionary grants. Specifically, the $17.5 million Good Jobs Challenge and $3 million Apprenticeship Building America grants are set to expire before new awards can be applied for and secured, according to the release. That creates an operational funding gap.

The Workforce Development division is pursuing grant extensions and new initiatives to help restore sustainability, officials say.

Uncertainty of grant funds
Cameron said the situation highlights the difficulty in relying on grants to fund programs.

It was important to Cameron to get the information in front of affected employees before July 1 in order to help them find other employment – a tough situation to be in.

“The uncertainty of grant dollars would make anyone concerned,” he said. “I have to be transparent about what those dollars look like.”

Cameron said it’s now necessary to reimagine how developing the local workforce is done, collectively – and not just for the city.

“That’s a challenge we need to address, and we’ll have to adjust," he said.

Cameron said the city has been working on workforce challenges for a while, including working to get relationships back in place between the city and the Ozark Region Workforce Development Board.

As he works on his first budget for the city, Cameron said he has maintained a general awareness of what it would take to keep the department going when general revenue dollars do not exist.

“Therein lies the challenge of anything with grants,” he said. “You get so dependent on them, then if they go away, you have to shut down. It’s an important model for people to consider moving forward.”

Cameron said the best use of grant funding is for catalyst programs, but not for all funding.

“If everything’s funded on a grant, when they get cut, who’s going to pay the bill?” he said.

According to Cameron, the 11 potential layoffs announced today may be the first of others to come in the Workforce Development division.

“We won’t know until October, but we’ll do our best to monitor it,” he said. “We can’t control what happens at the federal level.”

And Cameron noted that other agencies are also facing impacts. State and federal funding cuts impacting the Springfield Regional Arts Council are one recent example; the city’s Housing and Urban Development programs are another. Even local grant support may be reduced or otherwise impacted.

“Everyone’s looking at how they’re having to tighten their belt with those programs,” he said.