Major federal agencies shrank their workforces in 2025 after presidential directives pushed downsizing across government, relying on buyouts, early retirements, reductions in force (RIFs), and broad hiring limits, according to a new Government Accountability Office report.
- Scope: GAO reviewed 22 large federal agencies and found they reduced headcount during calendar year 2025.
- Separations: Nearly 378,000 employees separated from those agencies in 2025, GAO reported.
- Timing: About 65% of separations occurred in the second half of 2025, indicating agencies accelerated actions later in the year.
- Tools used: Agencies reported using a mix of:
- Voluntary Separation Incentive Payments (VSIPs) (“buyouts”)
- Voluntary Early Retirement Authority (VERA) (“early-outs”)
- RIFs and other involuntary separations
- Hiring restrictions, including limits on backfilling vacancies
- Implementation: GAO said agencies followed presidential directives and adjusted workforce plans to meet reduction targets, often combining voluntary programs with tighter hiring.
GAO’s findings land as agencies continue to manage staffing levels amid budget pressure and shifting administration priorities. The report highlights how separations were not evenly distributed through the year, with most occurring after mid-year—when agencies typically have clearer budget signals and more time to execute incentive offers, process retirements, and finalize position eliminations.
For employees, the mix of voluntary and involuntary tools matters. VSIPs and early-outs can change retirement timing and income, while hiring freezes and vacancy controls can reshape workloads and promotion opportunities even for those who stay. RIF activity can also trigger placement rights and competition procedures that vary by agency and bargaining unit.
Employees considering retirement or separation should review how an earlier exit could affect their annuity, especially under FERS. Tools like a FERS retirement calculator can help estimate how different retirement dates and service credit scenarios may change projected benefits.
GAO did not characterize the separations as uniform across agencies, and the report focuses on governmentwide patterns rather than individual agency outcomes. The watchdog’s topline numbers reflect separations across the 22 agencies studied and include retirements, resignations, and other departures captured in agency workforce data for 2025.
Source: GAO Reports