The report, which was released on Thursday, says the current system is too costly, and school districts are sending more pink slips than necessary.
The report says the state's notification timeline is out of sync with the state's budget process. The education code mandates pink slips be sent by March 15 and final job elimination notice be given by May 1.
These dates force districts to make budget decisions without an accurate idea of how much money they'll receive for the fiscal year that begins July 1, and many schools overcompensate for fear of a deeply slashed budget.
The report recommends that initial layoff notices be given later in the year, on June 1, and final notices be pushed to August 1.
Teachers have an automatic right to appeal a layoff. So, excessive layoffs wind up costing the state money because it costs the district an average of $700 per layoff during the costly appeals process, which mostly covers legal activities and personnel.
Also, analysts recommend that districts consider student performance, teacher quality, classroom management, teacher attendance and leadership rather than seniority when it comes to layoffs.
The Legislative Analyst's Office's report was based on a survey of 230 of the state's 950 school districts.
The Associated Press contributed to this report.