Reykjavik cuts 74 central administration positions, lays off 50

Reykjavik city has issued dismissal notices to 50 employees as part of a reduction of 73.8 full-time positions in its central administration, mbl.is reported. Three of those receiving notices have been offered other vacant jobs.

The reductions also include positions lost through staff turnover, temporary contracts and a hiring freeze. The city said the measures are the final phase of a wider staffing reduction, with estimated savings of about 2.3 billion Icelandic krónur between June and October.

Reykjavik City Council approved a plan to limit central administration positions to no more than 7.5% of the city’s total workforce. The share was 8.4% in June 2026. The latest measures are expected to produce annual savings of about 1.3 billion krónur.

The city said the cuts focus mainly on central administration, internal services and management, rather than jobs providing daily services to residents. It said statutory duties and basic services would be prioritised, while work continues to simplify procedures and reduce administrative overhead. Employees losing their jobs can seek support from psychologists and help with their job search through a recruitment agency.

The measures affect five departments and two offices, including the human resources and work environment department, the finance and risk management department, and the service and innovation department. The city will continue cost-control measures and maintain tighter hiring rules. Further work by the council’s efficiency group will focus on asset sales, procurement, and proposals concerning staff absences and sick leave.