The Pause Before the Storm: Federal Layoffs, Legal Fights & Economic Shockwaves-Issue 3
Published on May 21st, 2025 on LinkedIn
Personal commentary. Views are my own—not those of any agency or employer.
As many of you are aware on May 14th, a California federal judge issued a temporary restraining order halting most federal agency RIFs until May 23rd. This legal pause affects mass layoffs at key agencies, including OMB, OPM, USDA, Commerce, Energy, HHS, HUD, Interior, Labor, State, Treasury, Transportation, VA, AmeriCorps, EPA, GSA, NLRB, NSE, SBA, and SSA. While this move offers a brief reprieve, it’s not a reversal—it’s a timeout. Agencies have simply shifted tactics: from buyouts and attrition to targeting probationary employees instead. As of today, 280,253 federal employees have already lost their jobs, and that number has temporarily plateaued only because of this court-ordered delay. Unless further legal action is taken, layoffs are expected to pick up steam immediately after May 23. The message is clear: this administration is still deeply committed to dismantling the federal workforce.
📌 Top Federal Workforce News (May 15–May 21, 2025)
🧬 CDC RIF Update: “One Employee at a Time” Layoffs. Despite the pause on mass RIFs, the CDC is proceeding with layoffs under the radar—terminating one employee at a time through attrition and restructuring. 🚨 Why It Matters: This quiet chipping away of talent avoids public scrutiny but still undermines the agency’s ability to respond to future health emergencies. It signals a long-game strategy of dismantling capacity without making headlines. That's why it's imperative to stay vigilant.
✈️ FAA Facing Attrition + Targeted Cuts. The Trump administration is offering buyouts to thousands of FAA employees while simultaneously threatening more layoffs. Key staffing at air traffic control and aviation safety offices is already down. 🚨 Why It Matters: Air travel safety is at high risk. With high-stakes roles going unfilled and workers leaving in masse, traveling may become even more riskier for the American public.
🏢 FBI to Relocate 1,500 Employees and Vacate D.C. Headquarters. FBI Director Kash Patel announced plans to vacate the J. Edgar Hoover Building in Washington, D.C., citing safety concerns. Approximately 1,500 employees will be reassigned to field offices across the country over the next three to nine months. 🚨 Why It Matters: This move signifies a significant shift in the FBI's operational structure, aiming to decentralize its workforce and reduce political influence. However, the lack of a clear timeline and new headquarters location raises concerns about potential disruptions to ongoing investigations and agency cohesion.
🛑 RIFs Paused, But Probationary Firings Resume. While a judge temporarily halted RIFs, agencies like HHS and DOI have resumed firings of probationary employees—those within their first year of federal service. 🚨 Why It Matters: This workaround strips new hires of protections and allows agencies to continue shrinking under the radar.
🧠 Intelligence Community Workforce Cuts Raise Alarms. Ronald Sanders, former federal human capital leader, warns that the Intelligence Community (IC) is jeopardizing national security by neglecting its workforce. The recent elimination of the Office of Human Capital within the Office of the Director of National Intelligence, reportedly due to its focus on Diversity, Equity, and Inclusion, raises concerns about the IC's ability to maintain a skilled and diverse workforce essential for effective intelligence operations.
🎖️ Pentagon Orders Major Reduction in Senior Military Leadership. Defense Secretary Pete Hegseth has mandated a significant downsizing of the U.S. military's top brass. The directive includes a 20% reduction in four-star general and admiral positions, a 20% cut in National Guard general officer roles, and a 10% overall decrease in general and flag officer billets across all military branches. This initiative, part of the "Less Generals, More GIs" policy, aims to streamline command structures and reallocate resources to frontline operations
🧪 NIH Director Breaks Silence. In a rare move, the NIH Director addressed staff about the layoffs, criticized the administration’s internal communications, and acknowledged that agency missteps contributed to recent public health crises. 🚨 Why It Matters: Leadership transparency is welcome—but coming this late, it reads more like damage control than genuine accountability. Meanwhile, NIH still faces deep staff cuts and morale loss.
🏛️ House Reworks Retirement Cuts. The House has backed off from its most extreme proposal to increase FERS retirement contributions for all federal employees. The provision was stripped from the reconciliation bill, though other changes remain. 🚨 Why It Matters: While this is a win for now, federal retirement is still under threat. The bigger question is: what gets bargained away next?
⚖️ Anti-Union Executive Orders Hit a Roadblock. A judge once again blocked enforcement of Trump’s executive order targeting federal unions, which would have gutted collective bargaining and silenced employee voices. 🚨 Why It Matters: Union protections are holding, for now. But the administration’s legal persistence shows they aren’t backing down from trying to dismantle labor rights in government.
The Ripple Effect: How Project 2025 Will Reshape the U.S. Economy
Sources:
📉 Economic Impact on the U.S. Economy
Significant Job Losses: The Atlanta Fed estimates that large-scale reductions in federal employment could lead to a decrease in national employment growth by 0.2 to 0.4 percentage points annually.
Income and GDP Decline: A substantial reduction in federal jobs could result in decreased aggregate income and slower GDP growth, particularly in regions with high concentrations of federal employment. States like California, Virginia, Maryland, Texas, and Florida—which each have over 95,000 federal employees—would feel the brunt of the impact. Other states in the top 10 include New York, Pennsylvania, Georgia, Illinois, and North Carolina, all of which host tens of thousands of federal workers whose spending supports local economies. As federal paychecks disappear, the economic ripple effect will be felt in housing markets, retail, and state tax revenues across these regions.
Strain on Unemployment Programs: State unemployment insurance programs may face increased pressure due to a surge in claims from both federal and private-sector layoffs.
🏢 Effects on the Private Sector
Contractor Vulnerability: Businesses dependent on federal contracts, including IT firms, construction companies, and research institutions, are at risk of significant revenue losses and subsequent layoffs.
Investment Uncertainty: Policy unpredictability is causing many business executives to consider scaling back hiring and investment in the near future.
🧑🤝🧑 Impact on Public Services and Citizens
Service Disruptions: Layoffs at agencies like the IRS and USDA are leading to delays in tax processing and disruptions in agricultural research, affecting public services and food security.
🧠 Erosion of Institutional Expertise
Brain Drain in Federal Agencies: Dr. Solange Charas highlights that the administration's pursuit of a $2.6 trillion reduction in government spending could create a significant brain drain in the federal government, undermining institutional knowledge and expertise. Forbes
Impact on Governance: The loss of experienced personnel may lead to inefficiencies and challenges in policy implementation, affecting the overall effectiveness of government operations.
🚨 Why This Matters
The proposed federal workforce reductions under Project 2025 could have far-reaching consequences, affecting not only government employees but also the broader economy, private sector, public services, and nonprofit organizations. These changes risk destabilizing communities and undermining essential services nationwide.
🔦 Spotlight: Fired Federal Workers That Are Building Something New
💼 FedsForward: Empowering Former Federal Employees
Karen Lee and Julie Cerqueira, both former federal employees affected by recent workforce reductions, have co-founded FedsForward, a nonprofit organization dedicated to assisting displaced federal workers in transitioning to new careers. Recognizing the unique challenges faced by their peers, FedsForward offers tailored support, including career counseling, networking opportunities, and resources to navigate the private sector job market. Their initiative not only provides immediate assistance but also fosters a community of resilience and mutual support among former public servants.
What to Watch Next
RIF Pause Expiring
The court-ordered pause on federal RIFs at major agencies—including HHS, Interior, State, and VA—expires on May 23. Unless extended, mass layoffs could resume immediately, putting thousands more federal workers at risk. Agencies are already preparing for next-phase downsizing, even as legal and union challenges continue.
VA Accountability Under Fire
Senator Blumenthal has publicly criticized the Department of Veterans Affairs for dragging its feet on implementing a major benefits expansion law passed in January. Meanwhile, Congresswoman Eleanor Holmes Norton is pushing for the creation of an Inspector General to oversee the Thrift Savings Plan, raising questions about transparency and financial security for federal retirees.
More Legal Challenges on the Horizon
With unions mobilizing and advocacy groups filing lawsuits, expect more legal challenges to layoffs, RIFs, and anti-union executive orders. The battle over Schedule F and the fate of civil service protections is far from over.
Broader Economic Impact
Federal job cuts aren’t happening in a vacuum. As layoffs expand, private contractors, nonprofits, and entire state economies—especially in California, Virginia, Maryland, Texas, and Florida—will start to feel the shock. Watch for , and increased strain on public services.
🛡️ Disclaimer: Workforce Watch is an independent newsletter created in a personal capacity. All views and opinions expressed are solely my own and do not reflect the views of any federal agency, department, or employer. Content is created during personal time using publicly available information and is intended for educational and informational purposes only.