Treasury eliminates offices and outsources work, with more layoffs coming

The Treasury Department has begun slashing some offices as part of President Trump’s efforts to reduce the federal workforce, adding several divisions of the Bureau of Fiscal Service to the cut list.

The department is outsourcing the work at the bureau’s Servicing of Savings Bonds, Debt Cross-Servicing Program and Paper Check Printing and Ancillary Services offices. The exact number of employees impacted was not immediately clear but multiple employees familiar with the matter expected it to be hundreds. 

“As part of the Executive Order Optimizing the Federal Workforce, Fiscal Service must reduce its workforce and operational footprint,” bureau leadership said in a message to staff on Thursday. 

Impacted employees were told their jobs were being eliminated in a town hall meeting this week. Employees are expected to still have the option to apply for early retirement, buyouts or the so-called “deferred resignation” program that, if accepted, would allow them to remain in paid leave status through September. 

BFS will conduct multiple phases of reductions in force, or layoffs, starting this fiscal year, the agency said. The final plan is still under review by Treasury and the Office of Personnel Management, but the initial moves—which will result in outsourcing—are already underway. 

The bureau added that additional areas may be outsourced after it receives final approval on its workforce reduction plan. Trump and OPM required an initial plan from all agencies by March 13, with a second document due April 14 to lay out new organizational structures and further RIF blueprints. 

Eric Engle, a BFS employee and union representative based in Parkersburg, W.Va.—home to the largest of the bureau’s offices—said more layoffs are expected imminently and all impacted staff will likely receive their notices by next week. As much as 25% of the bureau’s 3,300 employees is expected to be cut. 

Engle’s division, the Administrative Resource Center, which provides shared services such as travel and procurement throughout Treasury and many other federal agencies, submitted a plan to cut 6% of its budget to comply with the Trump administration’s reduction efforts. Treasury rejected the plan, saying it should instead cut 25% of its spending. 

The services already cut this week were part of the Retail Security Services within the Division of Customer Service. Employees there worked with investors to service their electronic and paper U.S. Treasury bonds. Those services will now be provided by the Federal Reserve Bank of Minneapolis and U.S. Bank. 

Employees at BFS do not believe those entities “have the knowledge base and background familiarity and training that has been provided under RSS,” Engel said, “and there is no way to get them up to the skills base and knowledge base that they need to perform the job.” 

Additionally, he said, the government will still have to pay for the work to get done. 

“As far as [the Department of Government Efficiency’s] mission, they’re not finding efficiency, they're not eliminating waste, fraud and abuse, and they’re certainly not saving money.” 

He added that his division, ARC, receives no direct appropriation and cutting the office will similarly fail to realize any savings. 

Treasury began issuing RIFs at the Internal Revenue Service last week, starting in just one small office but with cuts scheduled to ramp up significantly in the coming weeks. IRS is expected to eliminate as many as 20,000 jobs, though the voluntary, incentivized departures could mitigate the use of RIFs.

The department did not respond to multiple requests for comment.