Sweeping Federal Worker Layoffs Leave States Reeling

Communities across the country have been reeling in recent weeks as billionaire Elon Musk, the DOGE team he leads, and the Trump Administration broadly continue their campaign of sweeping and haphazard layoffs across the federal government, with deeper cuts through agency plans now starting to unfold as well. Widespread job cuts are now planned for a range of agencies that deliver crucial public services, such as public education, Medicaid and Medicare, food safety, affordable housing, Social Security, public health, and health care for veterans, among others.

Initial rounds of layoffs are already touching people in every state, harming laid-off workers and their families and the public who rely on the broad range of vital services that federal workers provide — like Social Security, Medicare, and Medicaid; safe food, drugs, highways, air travel, and drinking water; accurate weather forecasting; and public schools. In addition, larger rounds of federal layoffs, such as those now planned at the Departments of Health and Human Services, Education, and Treasury, are likely to lead to longer-term fallout for state budgets and local economies.

In 2023, federal agencies employed about 3 million people nationwide, accounting for about 2 percent of the total civilian workforce — a share that’s remained roughly constant for the past 25 years and is down slightly from decades prior. These public employees live and work in local communities across every state (see Table 1), including about 83 percent who reside somewhere other than Maryland, Virginia, or the District of Columbia (see chart).

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Upon entering office, the Trump Administration quickly moved forward with ill-conceived terminations of federal workers based not on performance or agency need, but solely on who was most recently hired or promoted, as these federal workers had fewer legal protections. For some agencies, courts have said these layoffs were illegal and ordered them to be reversed. The Trump Administration has appealed those decisions, leaving the issue in doubt for now.

In any event, Musk, cabinet secretaries, and the President have made clear that they will move forward with reductions in force (RIFs) — a means by which agencies eliminate positions because of a reorganization or lack of funding. While these RIFs will likely raise serious legal questions and be challenged in court, many of the people at agencies overseeing areas like agriculture, health, housing, and consumer protection, who had their terminations temporarily reversed, could soon be laid off once more. They would have to, again, await the outcome of ongoing legal challenges.

This early chaos reverberating across the states provides a window into the expected harm from the Trump Administration’s broader plan for mass layoffs. Nationwide, the early round of layoffs included both experts in government agencies — like engineers, economists, and scientists — and a diverse array of frontline workers administering public services people count on every day. For example:

• In Georgia, home to about 106,500 federal workers, DOGE’s preliminary round of layoffs slashed about 10 percent of staff at the Atlanta-based Centers for Disease Control, a major regional employer that helps protect U.S. residents from outbreaks, oversees research for vaccines, and leads national public health efforts.
• In Kentucky, where nearly 35,000 federal workers reside, laid-off federal workers held a diverse set of occupations supporting agriculture, housing, international development, parks, and other public services. These workers are now raising the alarm about the fallout for public services and their own families in local news outlets.
• And in Iowa, home to about 22,000 federal workers, layoffs of dozens of researchers at the National Centers for Animal Health could jeopardize important farming support programs, including livestock disease and vaccine research done nowhere else in the world.

The types of jobs being targeted for cuts illustrate the breadth of services federal employees provide. Federal workers perform a variety of jobs that support essential services, including scientific research, rural economic development, weather forecasting, disaster relief, and education access — for example, providing Pell Grants for low-income students and funding for schools to provide specialized support for students with disabilities.

The people doing those jobs are also highly diverse, as federal employment has long been an important avenue to economic opportunity for people of all backgrounds. About 30 percent of federal workers today are veterans (compared to only 5 percent of the total workforce) and 21 percent self-identify as disabled (compared to the national disability rate of 5 percent). Federal employment has also historically offered important avenues to equal opportunity for women and people of color, in many places playing a central role in building the Black middle class. 

Beyond the immediate damage to federal workers themselves, widespread layoffs will also carry larger and longer-term implications for states and localities. As more workers are laid off, the ripple effects could noticeably undermine core public services, strain local economies, and add unexpected burdens to state and local budgets.

For one, the provision of reliable, high-quality public services at every level of government depends on an adequate number of experienced, well-trained workers to get the job done. But the initial wave of DOGE-led layoffs has already disrupted the reliability of services such as Social Security, taxpayer support, and veterans’ health care, creating both headaches and direct harm to people at the state and local level who use these services. Deeper job cuts now in the pipeline would surely worsen the trend.

Widespread workforce cuts also undermine the vital role a healthy public sector plays in keeping money flowing through state and local economies. As recently unemployed workers cut back on their consumer spending, local businesses will feel the blow, especially in communities with a larger federal footprint, such as those near military bases, national parks, or federal field offices. Private companies also contract with federal agencies every day to perform all kinds of services, a relationship that depends on both reliable funding and adequate staff. Even just the early DOGE-led cuts to contracts and grant funding have rippled out to cause more harm, including job losses at critical research institutions and local nonprofit groups. In Kansas and Wisconsin, for example, farmers are reeling after the near-dismantling of the U.S. Agency for International Development (USAID), which in 2024 purchased $2 billion worth of U.S.-grown crops for humanitarian aid.

Such economic fallout would translate into additional harm for state and local budgets and the critical services they provide. Less disposable income means less money to collect through income or sales taxes, effects which could be especially stark for places with large numbers of federal workers. An early warning sign for communities elsewhere is that Washington, D.C.’s local government now expects a $1 billion revenue loss over the next three years, due largely to the projected federal layoffs. States are likely to face some increased costs too, such as increased demand for social services and heightened strain on unemployment insurance systems.

The initial wave of harm at the state and local level is likely to worsen soon. President Trump’s February call for agencies to prepare for much deeper, broader reductions in force, and the more concrete agency announcements beginning to emerge since then, threaten widespread damage to workers, families, and local economies in every state. Federal policymakers should act urgently to stop these mass firings.