Will Federal Government Job Cuts Solve Our Worker Shortage?

Big numbers are crushing our newsfeeds regarding present and future job cuts in the federal government, all of which makes us wonder how this may impact employment in each of our own companies. With “help wanted” signs continually in place on electronic job postings as well as literally on shop doors, do the fed job-doom headlines mean the resulting more feet on the street will provide hiring relief for each of us?

Let’s first pull back from the numbers and consider the people getting cut. Perhaps no group of American workers has felt so job-secure for the years or even the decades that they’ve worked for the feds, and maybe even chose to work for our federal government to avoid the ups-and-downs of personal job insecurity. It’s easy to say that no one saw this coming, yet if you are let’s say 52-years-old with 20-plus years of federal service, you’ve likely honed skills that are specific to your government career field and now must find a way to continue generating income for another ten or twenty years before you can retire.

And pay your mortgage and buy food along the way. That’s a very steep uphill climb that none of us would ever want to face.

The Meaningful Numbers to Consider

The Wall Street Journal took the first try at understanding the impact of fed worker layoffs against the overall labor force. Here are some of their findings:[i]

• The federal government is our nation’s biggest employer with 2.4 million civilian employees, not including the post office.
• While that number is high, it actually represents just 1.5% of non-farm jobs across our country.
• The best projection today is the actual cuts might reach as high as 475,000 jobs which is about 20% of the total fed employment. This figure comes via an estimated 75,000 resignations, 200,000 fired probationary employees, and 200,000 in normal annual attrition whose jobs could be frozen.

From another viewpoint, the federal workforce comprised a full 4.3% of the total workforce way back in 1960, and has been steadily falling since to where just 1.5% of all workers are employed by the federal government today.[ii]

Said a Johns Hopkins economist, “If you cut that workforce by 20% and the other 80% can comfortably do the jobs that need to get done, that’s a rounding error.”

This report was filed this past Sunday morning, and then on Sunday evening came more news:

“USAID is beginning to implement a Reduction-in-Force that will affect approximately 2,000 USAID personnel with duty stations in the United States…”[iii]

So the WSJ-estimated 475,000 cuts just increased by an additional 2,000 cuts.

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Further Reading: Will AI Replace Enough Jobs to Fix Worker Shortage?

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Who Works for the Federal Government?

Surprisingly, more than half of our government workers do their work to defend our country in some way. In fact almost half a million of them work in the department of Veterans Affairs alone, providing services to those who served in our military. And about a third of all federal employees did indeed serve in our military.[iv]

Another false assumption would be that most federal workers live and work in the Washington, DC area, whereas less than a quarter do. The rest are scattered around our country and a lesser amount are scattered around the world.[v]

USAID has been subject to much news about cuts. Two Sundays ago 60 Minutes reported that 40% of those workers were lawyers or other white collar professionals.

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Further Reading: Fewer Students, Fewer Workers, and a Hiring Crisis Ahead – Are You Ready?

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What This Means for Filling Your Openings

First, let’s note that this story updates daily, or to use last Sunday as an example there were two major stories that are referenced here, the first from the WSJ and the other from CNN. But based on what we know, there is little reason to believe that many current openings across our country will be filled by those being cut from our federal government. This is based on the total number of cuts being smaller than they first appear, and also the nature of the skills and experiences of those being cut.

And for those of us in the security field, there is reason to believe that our government will ramp up hiring in order to identify, locate, arrest, and deport targeted immigrants, and therefore provide more competition for finding talented workers for those related jobs.

Employee Retention for Organizational Success

Now is the time to plan how you will retain your best workers now to mitigate the numbers you will need to hire in the future. If you know you need to address turnover or improve engagement but aren’t sure where to start, email me at DFinnegan@C-SuiteAnalytics.com and I promise to help you jump start your employee retention strategy now, so you can see results this year.

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[i] https://www.wsj.com/economy/jobs/what-do-mass-federal-layoffs-mean-for-the-labor-market-33515410

[ii] https://www.calculatedriskblog.com/2024/11/how-many-people-work-for-us-federal.html#google_vignette

[iii] https://www.cnn.com/2025/02/23/politics/usaid-employees-administrative-leave-email/index.html

[iv] https://www.npr.org/2025/01/31/nx-s1-5280417/federal-workers-workforce-facts-cuts

[v] ibid