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California's pregnancy disability leave law (PDL) has very strong job protection rights. However, you can lay off an employee out on PDL if you can show the employee clearly would have lost their job even if not out on a protected leave.
If all the employees in that department are being laid off, the employee can be laid off at the same time. An employee who is on PDL does not have any greater right to job protection in this situation than other employees do.
However, if some employees are being transferred to other departments instead of being laid off, then you will likely have a much more difficult time justifying the layoff and should consult with legal counsel before making any final decisions.
Read more about Returning to Work After PDL and Layoffs in the HR Library.