Topline

Approximately 65,000 federal employees have accepted a buyout offer made by President Donald Trump to more than 2 million government workers in an unprecedented move to shrink the U.S. government that, if it passes legal muster, will become the largest single job reduction in U.S. history.

Key Facts

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The Biggest Corporate Job Cuts In U.s. History

1. IBM: Currently, the all-time record for the largest corporate job cut belongs to tech company IBM, which laid off 60,000 people in 1993, the same year it posted an $8 billion loss.
2. Sears: Sears, Roebuck & Co. cut 50,000 jobs and closed 113 stores in 1993.
3. Citigroup cut 50,000 jobs amid the 2008 financial crisis.
4. General Motors closed five factories and cut 47,000 jobs in 2009, also during the Great Recession.
5. AT&T laid off 40,000 people, about 14% of its staff, in 1996.
6. KMart in 2003 announced it would close 326 stores and cut 35,000 jobs (one year after cutting 22,000 positions in 2002),
7. Ford laid off 35,000 people in 2002 (and announced another 30,000 job cuts in 2006).
8. Circuit City: The consumer electronics chain closed 567 stores and laid off 34,000 jobs after declaring bankruptcy in 2009.
9. Boeing: In the wake of the Sept. 11, 2001, terrorist attacks, Boeing axed 31,000 jobs, or 15% of its workforce, (three years earlier the aerospace giant had a mass layoff of 28,000 jobs).

The Largest U.s. Government Job Cuts

The U.S. government is also no stranger to massive cuts, but not at the scale proposed by Trump—the U.S. Army eliminated 50,000 jobs in 2011, the Air Force cut 40,000 in 2005 and the U.S. Postal Service cut 30,000 jobs each year in 2002, 2009 and 2010. By comparison, if even just 10% of employees accept the offer from Trump, more than 200,000 people could be out of work in one swift motion. Historically, mass layoff attempts by the federal government haven’t worked out. President Ronald Reagan in the 1980s promised to shrink the size of the government largely by eliminating two large agencies—the energy and education departments—but he plan never came to fruition due to Congressional opposition.

Tangent

The concept of mass layoffs at large companies is a relatively new one and the practice didn’t become commonplace until the 1970s, when such a move was still perceived as a sign of a company in serious distress. Even as they increased in frequency through the 1980s and 1990s, executives who ordered layoffs were described as “corporate killers” and given nicknames to highlight their ruthlessness (former GE head Jack Welch, for instance, earned the name “Neutron Jack” after promoting his corporate practice of firing the bottom-ranked 10% of employees each year). By the mid 1990s, almost half of the largest U.S. companies had announced layoffs and downsizing had become a routine management practice.

Big Number

58%. That’s how many Fortune 100 companies announced layoffs in 2023, according to Bloomberg, up from 45% in 1994 and 5% in 1979.

Key Background

Trump has pushed to cut the size of the federal government, creating a new Department of Government Efficiency (with billionaire Elon Musk at the helm) to oversee spending cuts. On his first day in office, he issued several executive orders aimed at federal employees, including those ending remote work arrangements and requiring employees to return to work on a full-time basis, instituting a hiring freeze and reinstituting a policy that makes it easier to fire federal workers in jobs that are normally apolitical. On Tuesday, more than 2 million employees received an email incentivizing them to resign from their jobs, warning all federal employees they would soon be subjected to “enhanced standards of suitability and conduct” and warning of future downsizing. The email said employees who choose to resign will be exempt from the return-to-office requirements and largely be not expected to work until Sept. 30. The X account for DOGE said the offer was a chance to “take the vacation you always wanted, or just watch movies and chill, while receiving your full government pay and benefits.” Senior Trump officials have said the plan could save the government up to $100 billion.

Chief Critics

Democratic lawmakers have warned the downsizing poses a threat to the services provided by the government, and have warned federal employees not to trust the current administration. The move, combined with Trump’s order Tuesday to block dispersal of federal loans and grants that was later revoked, has also raised questions about if Trump has the authority to unilaterally cut spending that was passed by Congress. A 50-year-old law exists that stops presidents from refusing to spend money Congress has appropriated, but Trump has vowed to restore the power to the executive office. Sen. Tim Kaine, D-Va., advised workers not to take the buyouts, warning that Trump could “stiff you” and not follow through on the promise of eight months of pay. Rep. Jasmine Crockett, D-Texas, called the buyout offer “fake” and said Trump will replace employees with “unqualified, inexperienced loyalists the second they leave.” Sen. Martin Heinrich, D-N.M., also warned employees against taking the offer, referencing allegations from contractors that Trump hasn’t paid them for work done in the past. The American Federation of Government Employees union warned that the employees “purging” process would have “vast, unintended consequences that will cause chaos for the Americans who depend on a functioning federal government.”

Crucial Quote

“He doesn’t have any authority to do this,” Kaine said of Trump. “Do not be fooled by this guy.”

Surprising Fact

The federal government is the largest employer in the United States.There are roughly 2.4 million federal workers without counting employees of the U.S. Postal Service which, if it were a private business, would rank among the 10 largest private-sector employers.

Further Reading

ForbesTrump Offers Buyouts To Federal Workers Who Resign By Feb. 6By Antonio Pequeño IVForbesTrump Administration Rescinds Grant Freeze Memo—Here’s Everything We KnowBy Sara DornForbesStates And Nonprofits Suing Trump Over ‘Catastrophic’ Pause In Federal Funding: ‘Immediate Nationwide Harm’By Alison Durkee