Administration Reveals Government Employee Layoffs as Shutdown Approaches Three-Week Mark

Administration officials disclosed the start of federal worker terminations on Friday, making good on earlier warnings in response to the ongoing US government shutdown, which is set to extend into its third straight week.

Formal Statement and Initial Details

The director of the White House budget office posted on social media that “reductions in force have begun,” indicating the official procedure for terminating staff.

Although Vought did not specify which departments were affected, a treasury spokesperson confirmed that layoff warnings had been issued within that agency. Furthermore, a DHS spokesperson indicated that staff reductions would also occur at the CISA. Also, a union representing federal workers confirmed that members at the Department of Education would be impacted by the reduction in force.

Union Response and Court Actions

Labor representatives cautions that the layoffs would have “severe consequences” on services relied upon by the public and vowed to contest the moves in court.

“It is disgraceful that the government has used the funding lapse as an pretext to illegally fire numerous employees who provide critical services to the public nationwide,” said a national union president, representing the AFGE.

The largest labor federation in the US responded to the news, saying, “America’s unions will see you in court.”

Legislative Impasse and Budget Dispute

Lawmakers from the Democratic party have declined to support a Republican-backed bill to restore funding unless it includes healthcare-centered concessions. Following multiple unsuccessful votes, the Senate’s Republican leaders have adjourned the Senate until the following week, indicating the deadlock is unlikely to be resolved soon.

At a press conference, the Republican House speaker, Mike Johnson, blasted opposition lawmakers for not supporting the GOP bill, which passed in the lower chamber on a largely partisan basis.

“This is the last paycheck that 700,000 federal workers will see until opposition leaders decide to fulfill their duties and reopen the government,” the speaker stated. “Starting next week, military personnel, many of whom live paycheck to paycheck, are going to miss a complete payment.”

Judicial and Practical Limits

Last week, labor groups filed for a court injunction to block the government from carrying out any layoffs during the funding gap. Moreover, a court official directed the government to disclose details on layoff plans, impacted departments, and whether any federal employees had been recalled to carry out staff reductions.

An analysis argued that a government shutdown restricts the ability of the government to conduct terminations, referencing official advice that admitted any permanent layoffs need to have been initiated before the funding expired.

Impact on Workers

These terminations took place on the same day that federal workers got only a incomplete payment for the final days of September but excluding the beginning of the current month, since appropriations expired at the start of the month.

Max Stier, the president of the advocacy group, condemned the political stalemate’s effect on federal employees.

This is unjust to make federal employees bear the burden because our leaders in the legislature and the White House have not succeeded to keep our federal operations open and operational,” the advocate said. “Our air traffic controllers, veterans’ healthcare providers, smoke jumpers and safety officials are not at fault for this funding crisis.”

A notable point is that members of Congress and senior White House leaders are still receiving salaries during the shutdown.

Steven Watts
Steven Watts

Eveline de Vries is a certified financial planner with 15 years of experience in wealth management and personal finance.