Detroit to Lay Off 5% of Workforce; Investigate Insurance, Work Comp Fraud

December 12, 2012

Detroit officials say they’re making plans to lay off 400 to 500 city employees in the new year, roughly 5 percent of the workforce.

The disclosure was made Dec. 7 as Mayor Dave Bing said he has enough votes in the city council next week to approve the hiring of outside firms to look for possible fraud in Detroit’s workers’ compensation program and health insurance.

Detroit is deep in debt and has a budget deficit of more than $200 million. The state likely will conduct a new review of city finances, an exam that could lead to an emergency financial manager.

The city hopes to spare police officers who work the streets from layoffs but there’s no guarantee. Bing compared Detroit’s poor finances to a “house on fire.”

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