As part of an ongoing effort to cut $500,000 from the current Oak Bluffs budget, two town employees were laid off this week and two other workers learned their hours will be cut in half. At least two more employees will be laid off or have their hours cut in the coming days as town leaders work to close the budget deficit for the fiscal year that began on July 1.

Town administrator Michael Dutton said assistant shellfish constable Peter Estrella and health department assistant Nathalie Woodruff received notices on Tuesday that they were being laid off.

Meanwhile principal assessor Diane Wilson and harbor administrative assistant Wendy Brough received notice their hours will be reduced from 40 hours to 20 hours, although they both will continue to receive benefits. Ms. Woodruff’s salary was $35,000; and Mr. Estrella’s salary was $40,800.

Ms. Wilson was receiving a salary of $66,000, which will be reduced to $33,000, Mr. Dutton said.

Ms. Brough’s salary was not immediately available.

Mr. Dutton said further layoffs or reductions in hours are imminent.

“I am fairly sure we will have a reduction in hours for at least two other employees, and possibly one other layoff,” he said.

Mr. Dutton said he notified the employees of layoffs and changes in hours on Tuesday morning. He said he worked closely with the personnel board to determine which employees would be laid off, and considered each position carefully before making the changes.

“We looked at every position and department function to figure out the best way to provide services to people while meeting our budget needs. I can assure you these decisions were not easy, we viewed layoffs as a last resort,” he said.

The town ended the fiscal year on June 30 with a deficit of $300,000 and is facing another $500,000 shortfall for the fiscal year that began on July 1. To stem the fiscal crisis early retirement was offered to all town employees, although there were no takers, and a hiring freeze was put into effect.

Town leaders also asked the Oak Bluffs School to cut $200,000 from their budget.

Earlier this month the Oak Bluffs School committee agreed to cut three faculty positions, slash general supplies and professional development funds and dip into school choice savings to help pay for a town budget shortfall.

School leaders cannot cut the positions until town voters agree to the reduction in the town budget at a special town meeting next month.

The layoffs of town employees this week will mean the reorganization of town government and a reconfiguration of town offices, Mr. Dutton said.

One possibility is merging the offices of the health department and the building department. Assistant building inspector Jim Dunn already is slotted to take over many of Ms. Woodruff’s previous duties.

Mr. Dutton said there are plans to streamline the licensing and permitting process and consolidate the harbor department, conservation commission and shellfish department into a single natural resources division.

At their regular meeting on Tuesday evening, selectman Kerry Scott criticized the process by which Mr. Dutton announced the layoffs. She said the original plan was to announce the changes almost two weeks ago, and said the prolonged process hurt morale and caused tension among employees.

“I am sorry that so many people lived with an axe over their hearts. It’s terribly unfortunate and inhumane,” she said.

Mr. Dutton defended the process, saying he waited to announce the layoffs so he could explore other options.

“I went through every different option I possibly could think of first,” he said.

Ms. Scott also alluded to the executive session during which selectmen approved the plan to reorganize town government. Although she voted for the plan, she said she raised concerns that largely went ignored and led to her being “shouted at and berated” by the other selectmen.

She also said Mr. Dutton and town finance director Paul Manzi did not do enough to prevent layoffs, and inferred other positions should have been targeted. “I don’t think we were as creative as we could have been, and I don’t think we involved the people we should have,” she said.

During the meeting, Mr. Dutton announced the special town meeting will take place on Oct. 20 at 7 p.m. at the Oak Bluffs School.

School committee chairman Priscilla Sylvia noted selectmen initially considered a date later this month; she expressed concerns the later date would delay layoffs at the school. “The sooner the town meeting, the sooner the layoffs . . . and the more money we can save,” she said.