Facing tight budgets, agencies turn to workforce restrictions to rein in costs

Updated Oct. 24 at 8:29 p.m.

Federal agencies across government are struggling to adapt to a tightened budget environment, leading several to restrict hiring or institute other controls to rein in workforce costs. 

President Biden came into office promising to invest in the civil service and rebuild staffing throughout the executive branch, after most agencies shed staff under former President Trump. He was initially successful in those efforts, but the budgetary winds have changed direction since he negotiated a two-year budget deal with House Republicans that capped discretionary spending in exchange for a debt ceiling suspension. 

That deal led to cuts of varying sizes across many agencies. An expected similar outlook for fiscal 2025, coupled with the uncertainty accompanying the current continuing resolution, has left agencies making drastic choices that could have reverberating effects for years to come. 

The Veterans Affairs Department was among the first agencies to set forth its plans to reduce staffing, creating new restrictions for hiring at the field level earlier this year that led to some facilities to pause bringing on new staff and revoking some jobs offers already sent out to applicants. VA subsequently announced it was looking to shed 10,000 employees, with officials insisting no hiring freeze is in place and the cuts would be managed through attrition. 

The change in approach followed a major hiring surge in fiscal 2023, but employees have still sounded the alarm over what they project will be stark consequences for VA health care.

The State Department, meanwhile, is bringing on record-setting classes for Foreign Service positions. On the civil service side, however, some bureaus have severely restricted hiring for at least part of the last fiscal year, according to multiple employees. The State Department and foreign operations budget absorbed a 6% cut to its discretionary funding in fiscal 2024, essentially setting it back to fiscal 2022 spending levels. The spending level forced State to institute 5% reductions on civil service staffing caps that excluded certain bureaus including Consular Affairs, Overseas Building Operations and Populations, Refugees and Migrants, a department spokesperson said. 

The civil service at State suffered among the largest losses of personnel of any agency under Trump, in large part due to a hiring freeze that continued well past the governmentwide one the previous president issued upon taking office. It has launched significant hiring efforts to backfill those positions, but was forced to pump the brakes at many of its offices. The spokesperson noted the hiring caps have since been revoked and the civil service workforce ended up growing during the fiscal year. 

The department could still face budget constraints going forward, however. State Secretary Antony Blinken told Congress earlier this year that his already understaffed workforce would suffer without more resources, saying already the department had “fundamental tradeoffs” to adjust to its new budget posture. 

The Biden administration has touted its efforts to improve the federal hiring experience even as much of it is forced to cut back on hiring. Trump is on the verge of potentially again taking control of the executive branch—bringing back the possibility he again implements a governmentwide hiring freeze, demands that agencies develop long-term plans to trim their workforces, relocation of agencies as part of an effort to shed staff or new ways to ease the mass firing of federal workers—and agencies may now face that reality with already diminished rolls. 

The U.S. Forest Service instituted a hiring freeze earlier this year, which Chief Randy Moore partially lifted over the summer. He maintained limits on external hiring for non-firefighting positions, citing below-normal attrition and budget concerns, and canceled some positions with tentative offers pending. 

“The Office of the Chief will approve future hiring of external candidates using a set of criteria,” Moore said in June. “We will focus on the highest priority positions needed to protect public health and safety, to fulfill critical mission deliverables, as well as positions that are highly specialized and/or have been demonstrated to be very difficult to fill internally.” 

Scott Owen, a USFS spokesman, said the agency will continue hiring to maintain its core of temporary firefighters in fiscal 2025 but will not hire any additional seasonal non-fire employees. 

“We understand that this will have an impact that will reverberate across all national forests,” Owen said, adding the Forest Service hopes to have more hiring options if funds become available.

Moore acknowledged to employees that the agency was seeing signs of a worn-out workforce and promised he would not ask them to do more with less. 

At the Justice Department, at least two of its components are communicating about belt-tightening to the workforce, according to employees there and internal documents obtained by Government Executive. The Executive Office of Immigration Review, which manages the nation’s immigration courts, has restricted hiring for support staff and slashed onboarding for new clerks through a program aimed at law school students and recent graduates, according to a senior employee there.

Rank-and-file employees are disappointed in the decision to target support staff, the employee said, especially as leadership has floated the possibility of extending it into the next fiscal quarter or taking even more drastic actions. Kathryn Mattingly, an EOIR spokeswoman, said the agency is continuing post openings for support staff and the agency is balancing "critical hiring efforts with retention efforts, including support and training for existing staff." 

Elsewhere in Justice, Bureau of Prisons issued a memorandum to senior leadership earlier this year noting they had to take on more than $400 million in new expenses—due to a governmentwide 5.2% pay increase and inflation—without receiving any new funding to pay for it. The bureau must prioritize hiring, acting Deputy Director Kathleen Toomey said, but should cut costs related to travel, training, overtime and hiring incentives. 

Aaron McGlothin, a corrections officer at a federal prison in Mendota, California, who represents employees there through the local chapter of the American Federation of Government Employees, said leadership has said it wants to fill the dozens of vacancies at his facility but has yet to put forward a concentrated effort to do so. 

Instead, the facility has reinstituted “augmentation”—the process by which the bureau taps cooks, teachers and other prison staff to serve in correctional officer roles (for which they have been trained)—to reduce overtime costs. In a report accompanying the most recent appropriations package, Congress directed the bureau to ensure non-correctional officers spend at least 90% of their time in their normal duties. Lawmakers added that augmentation “stretches correctional facility staff too thin, leading to unsafe conditions for both staff and inmates.” The strain on employees is causing some to seek other federal jobs or retire, McGlothin said, who added that people “are leaving in droves” and “running from this agency.” 

“We’re hurting really bad across the board,” he said. “We need staff.” 

The Social Security Administration is similarly looking to slash overtime costs. Administrator Martin O’Malley has warned for months that the agency desperately requires additional funding and ongoing flat funding would require a hiring freeze and shedding staff that would lead to its smallest workforce in 50 years. O’Malley and the White House sought a funding boost for SSA as part of the CR that is now in effect, but Congress declined to provide one. The agency is only recently coming off a hiring freeze that it implemented in 2023. 

For now, an agency spokesman told Government Executive, SSA “must operate conservatively” and “restrict hiring to critical targeted areas.” It is also reducing overtime to cut costs to historically low levels, meaning more customers waiting in lobbies and workloads going unfinished. 

The Education Department is taking another approach to reduce its workforce costs: the agency plans on offering early retirement and buyout incentives, as was first reported by Federal News Network. A department official told Government Executive the early retirement and buyouts would “help manage budget constraints while minimizing the impact to our work.” The department is taking a forward-looking approach, the official said, meaning it is “continuing to recruit positions” while assessing its budget reality and its skill needs for the future. 

Agencies are set to figure out their fiscal 2025 fates in the coming weeks. The current stopgap funding bill is set to expire Dec. 20, though lawmakers have yet to agree to stick to even the modest 1% funding boost provided by the budget deal as part of the Fiscal Responsibility Act. 

Last month, Moore, the Forest Service chief, held an agency-wide meeting to inform them of his decision to implement a partial hiring freeze. He sought to reassure them by emphasizing their decisions were not unique.  

“We're not alone in doing this,” Moore said. “There are many other agencies having these discussions as well. They're happening all across the federal government right now.”

This story has been updated with comment from the State Department, including which bureaus were excluded from reduced hiring caps.