Four employees were laid off Friday at the Portland Bureau of Development Services as the city’s development boom shows its first signs of slowing.

In an email to employees, Rebecca Esau, the Development Services director, said the cuts come as officials there were given a “quite sobering” forecast for Portland building trends.

A construction slowdown by definition hurts the bottom line for Esau’s bureau, which gets most of its funding from permit application fees.

“The longer we wait to reduce expenditures, the worse future cuts will need to be,” Esau wrote in the email, obtained by The Oregonian/OregonLive.

She added that the bureau expects “a downturn” in its five-year financial plan and is taking measures now to “make our reserves last longer to preserve as much stability as possible.”

The apparent start to the slowdown does not bode well for Portland’s increasingly restrictive housing policies, which some developers have said will discouraging construction by builders' profits.

Esau’s decision is a proactive step that prior officials didn’t take during the last recession. The bureau and its then-commissioner-in-charge, Rand Leonard, held off on making layoffs until 2009, when budget setbacks forced officials to cut 90 jobs.

Today, along with the layoffs of four probationary employees, the bureau, which employs more than 450 people, will freeze most hiring through 2019, limit city-funded travel for work, end an internship program with Portland State University, postpone building upgrades and halve its offering of seminars to help homeowners learn about permit requirements.

Development Services’ full-time employees will also be allowed to cut their workweek by a full day, according to Esau’s announcement.

News of the layoffs comes days after Mayor Ted Wheeler and the city commissioners received news from the city economist, Josh Harwood, who predicted that even a slight economic downturn would necessitate deep cuts to Portland’s budget.

The cutbacks also land amid a push from the mayor’s office for Development Services to complete a longstanding project to move Portland’s byzantine paper-only permits system online. That project is now in its second incarnation after the first fell years behind schedule and blew through $8 million.

Wheeler has said bringing the system online is a key initiative for his office, and the mayor took control of Development Services from Commissioner Chloe Eudaly when he shuffled bureau assignments in August.

-- Gordon R. Friedman

GFriedman@Oregonian.com

Elliot Njus of The Oregonian/OregonLive contributed reporting.