Gascon told commissioners that "a very large number of personnel" will be gone in 2.5 to three years due to retirements and budgetary restraints that could limit new police academy classes.
The department could lose 25 percent of its workforce in the next five years, he said.
Gascon said he was involved in discussions with city officials about the issue.
In addition to significant reductions in overtime, 78 officers will be retiring this year, without new academy classes to fill the gap.
"The problem, again, at the end of the day, comes down to money," Gascon said.
San Francisco closed a $482 million deficit this year and is expected to face about a $400 million deficit next year, according to the controller's office.
Gascon noted that he would be far more concerned if San Francisco were facing a rise in crime amid the budget difficulties. He said overall crime this year is down 9 percent from last year, with a 4 percent drop in violent crime and a 10 percent drop in property crime.
The number of homicides in the city so far this year, 37, is the same as last year, which is a significant drop from 2008's homicide numbers.
"So the crime picture continues to be a good one," Gascon said. He stressed that flexibility was needed in order for the Police Department to deploy officers to neighborhoods that see spikes in crime.
"At this point, we have been able to do well with the resources that we have," he said.