CED Newsletters & Policy Alerts

Policy Alert: Administration Plans for Reducing the Federal Workforce Take Shape

April 04, 2025

Action: On February 11, the President issued an Executive Order directing agencies to develop plans for reductions in force that would consider “whether the agency or any of its subcomponents should be eliminated or consolidated.” According to documents submitted by 22 agencies obtained by The Washington Post, the Administration is planning for cuts ranging from 8-50%. This includes reductions of 8% at the Justice Department, 25% at the Interior Department, 30% at the Internal Revenue Service, and 50% at the Department of Housing and Urban Development. An Administration spokesperson said that plans are drafts and not final.

The President also issued an Executive Order on March 27 seeking to reclassify employees of a range of agencies as holding positions primarily related to national security work, and seeking to invalidate existing collective bargaining agreements covering these employees, about 75% of Federal employees already in a union.

Key Insights

• The Administration has made reducing the size of the Federal workforce a priority and has employed a variety of strategies to accomplish this goal, including hiring freezes, incentivizing voluntary separations, and pursuing involuntary cuts. Dismissals of Federal employees are governed by a variety of laws and regulations which have slowed the Administration’s efforts.
• The “Reduction in Force” (RIF) process is the Administration’s most powerful tool for dismissing the largest number of employees, and, according to some experts, the approach most likely to withstand legal scrutiny.  
• The plans submitted to the White House are the first step in the RIF process, which may still take months to complete if conducted according to the statute.
• Since the documents obtained by The Washington Post represent only a subset of impacted agencies and, according to the Administration, are not final, it is unclear how many employees will ultimately be dismissed through the RIF process.
• The Civil Service Reform Act of 1978 establishes Federal employees’ rights to join a union but permits the President to exempt any agency or subdivision of the agency if the President determines its primary function is “intelligence, counterintelligence, or national security work.” The exemptions were specified by a 1979 Executive Order issued by President Carter.
• The President’s order significantly broadens the scope of exemptions to include, with few exceptions, nearly all employees subject to collective bargaining at the Departments of State, Defense, Treasury, Veterans Affairs, and Justice, along with agencies such as the Bureau of Land Management, USAID, the National Science Foundation, and the FCC. The order would eliminate collective bargaining agreements for about 67% of the Federal workforce and 75% of workers who are already in a union.
• The White House noted that the order is a response to “hostile Federal unions that . . . jeopardize[ ] [the President’s] ability to manage agencies.”
• The National Treasury Employees Union, which represents about 100,000 employees across 37 agencies, has filed a lawsuit challenging the Order, arguing that the Order exceeds the President’s authority to make exemptions.