Anthropogenic stress has been shown to reduce coral coverage in ecosystems all over the world. A phase shift towards an algae-dominated system may accompany coral loss. In this case, the composition of the reef-associated fish assemblage will change and human communities relying on reef fisheries for income and food security may be negatively impacted. We present a case study based on the Raja Ampat Archipelago in Eastern Indonesia. Using a dynamic food web model, we simulate the loss of coral reefs with accompanied transition towards an algae-dominated state and quantify the likely change in fish populations and fisheries productivity. One set of simulations represents extreme scenarios, including 100% loss of coral. In this experiment, ecosystem changes are driven by coral loss itself and a degree of habitat dependency by reef fish is assumed. An alternative simulation is presented without assumed habitat dependency, where changes to the ecosystem are driven by historical observations of reef fish communities when coral is lost. The coral–algal phase shift results in reduced biodiversity and ecosystem maturity. Relative increases in the biomass of small-bodied fish species mean higher productivity on reefs overall, but much reduced landings of traditionally targeted species.