Bloomberg: US may reduce number of federal employees by 1.2m people
According to an analysis by the Federal Reserve Bank of Atlanta, the size of the federal workforce in the US may fall by more than 1 million people, mainly due to an expected reduction in those indirectly employed by the government through contracts and grants, Bloomberg reports
“Given the size of the federal workforce, the reduction in employment levels could have a measurable impact on labour market outcomes,” M. Melinda Pitts, a researcher at the Atlanta Fed, wrote in her blog post.
President Donald Trump has initiated a massive reduction in the number of federal employees across the country in an attempt to cut waste and government spending. According to Pitts, these measures, as well as the suspension of hiring and early retirement options, could reduce the total federal workforce, which includes employees working on contracts and grants, by 1.2 million people.
In late 2024, before these programmes took effect, more than 2.4 million people were directly employed by the federal government, the study notes. However, it is estimated that by February 2025, more than 8 million people worked directly or indirectly for the federal government under contracts and grants, significantly expanding the range of workers who could be affected by the cuts, the analysis says.
Pitts cited data from the website layoffs.fyi, according to which 136,621 people had been laid off from the federal workforce as of April 1st, with a further 170,214 agencies planning to reduce staff.
