The mayor wanted union leaders to accept furlough days for their members. But they refused to meet with the mayor on Wednesday.
It is labor management brinksmanship the likes of which the city of Chicago has not seen in decades.
Thursday, Mayor Daley whose government is running a $25 million a month deficit took the standoff to a new level.
"We still have options that will save jobs, if only we can find common ground with the unions," said Daley.
The mayor tried to leave himself and the unions some wiggle room, insisting there was still time for them to come around and see things his way.
Daley used the news conference to let city workers to know that he will take the next step toward mass firings.
"Layoff notices will likely go out over 1,000 city workers across every department as soon as tomorrow," said Daley.
City officials say they've already chosen the nearly eleven hundred city workers to be given notice. They are represented by as many as 40 different unions who so far have refused to agree to the mayor's demand that workers take sixteen days off without pay before the end of the year.
Union leaders, who did not join city officials at negotiations on Wednesday, say the mayor won't listen to their demand that the city use its $1.2 billion "rainy day fund" to pay its workers during the recession.
"While the city doesn't respond, the city dictates, basically saying no, there's this gaping budget hole and the only way to fill it is to get rid of employees," said Matt Brandon, Service Employees Intl. Union.
"We can't afford to have this diminishment of services and the mayor ought to be looking at other places to fill the budget holes," said Henry Bayer, AFSCME Council 31.
The unions have demanded that as a condition of accepting furlough days the city must guarantee their jobs for two years. The mayor says in these times that would be bad business.
"This problem is not going to go away this year or next year or the following. This is much more serious than people think," said Daley.
At the news conference, the mayor would not say what date the letters would specify that the layoffs become effective. The conventional wisdom is that the Daley administration wants changes in place by July 1.
And on Thursday for the first time Mayor Daley talked about his nephew, Robert Vanecko's controversial city pension deals. I'll have that report at 6 p.m.
Charles has more on the political beat in his Precinct 7 Blog.