Federal layoffs strain D.C. region as Trump administration threatens more cuts

Federal layoffs are straining the Washington area, forcing droves of workers and private contractors out of their jobs this week as the Trump administration threatens more cuts.

The Office of Personnel Management estimated that about 300,000 of the 2.5 million federal workers would be “departing the federal government” by the end of Tuesday, the end of the federal fiscal year.

Roughly 154,000 accepted voluntary buyouts to go on paid leave or retire early after President Trump returned to office in January, the federal government’s chief human resources agency said in an email.

“And we don’t have an exact number of employees hired back after being let go or taking one of the voluntary programs offered, but we know that number is in the hundreds, which is a small percentage,” an OPM spokesperson said.

Multiple reports show that the Trump administration’s campaign to cut waste, fraud and abuse in government spending has hit the Washington area especially hard: Roughly 1 in 5 federal workers and 1 in 4 private government contractors live in the District, Maryland and Virginia.

The Federal Reserve Bank of St. Louis estimated that 20,000 of the 85,000 workers who left the federal government from January to mid-August live in the Washington area.

Jack Salmon, an economist at George Mason University’s free market Mercatus Center, predicts that the 75,000 federal workers expected to drop off government payrolls from deferred resignations this week will include another 15,000 to 20,000 area residents.

“The overall impact has been to nudge the unemployment level higher in the region,” Mr. Salmon said in an email.

The latest Bureau of Labor Statistics figures show the region’s unemployment rate surged from 5.3% in January to 6% in August, the highest in the nation. Nationally, the average unemployment rate was 4.3% in August.

The layoffs have also driven an uptick in home listings for sale, especially in affluent enclaves of suburban Maryland and Northern Virginia.

Last week, the left-leaning Brookings Institution and the Metropolitan Washington Council of Governments launched the DMV Monitor, an online report on the District, Maryland and Virginia that found Trump layoffs hitting the area especially hard.

It found that the number of Washington area home listings jumped by 64% from June 2024 to June 2025, double the rate of the rest of the nation. Over the same period, internship openings and hotel spending declined across the region.

“This White House has made a very effective effort to shrink the federal government in terms of staffing, funding, procurement and real estate,” Amy Liu, a Brookings senior fellow and co-author of the DMV Monitor, said in a Tuesday interview. “That’s having a big impact on Virginia and Maryland because of the outsized role the federal government plays in their economies.”

In Fairfax County, the Brookings report noted that the unemployment rate jumped from 2.5% in June 2024 to 3.5% in June 2025.

Unemployment rose from 3.2% to 3.7% in Prince George’s County and from 5.1% to 5.8% in the District over the same period.

The U.S. unemployment rate ticked up from 4% in June 2024 to 4.1% in June 2025.

Ms. Liu observed that although the Clinton administration implemented mass federal layoffs in the 1990s, it outsourced much of the work to contractors, triggering economic growth.

By contrast, the Trump administration has slashed contracts and moved to shutter several agencies, including the U.S. Agency for International Development.

“The government shutdown will only add to the anxiety that private workers and businesses in the D.C. area are feeling,” Ms. Liu said. “This administration’s effort to gut the federal government is unprecedented because of its scale, speed and congressional support.”

According to the Department of Government Efficiency website, the Trump administration has canceled 13,231 contracts worth $59 billion and roughly 15,000 grants worth $44 billion.

In fiscal 2024, more than 100,000 private companies received federal contracts worth about $774 billion.

The DMV Monitor found signs that those moves have created a ripple effect: Nongovernmental mass layoffs in the District, Maryland and Virginia surged by 139% from June 2024 to June 2025, compared with a 4.6% increase nationwide.

“The volume of buyouts, administrative leave placements and contractor terminations has significantly outpaced any known reinstatements,” Chad Cummings, a business law instructor at Florida Gulf Coast University, said Tuesday.

“Private-sector hiring has stagnated in parallel,” he added in an email. “New job openings are not matching the skills of displaced workers.”

The Trump administration has shown no sign of ending the federal layoffs, and many analysts expect them to continue indefinitely.

Mr. Salmon of George Mason University said the Trump administration would need to trim the federal workforce to 1.88 million employees to match a Clinton administration low recorded in 1999.

He calculated that five new private sector jobs and two new state or local government jobs were created for every 20 federal jobs lost in the District, Virginia and Maryland as of mid-August.

“While the federal government shed jobs, the private sector and possibly state or local governments created enough jobs to soften the overall decline,” Mr. Salmon said.

The Trump administration did not respond to a request for comment.

As October and the new fiscal year start, the White House has signaled that a government shutdown could trigger a new round of layoffs starting Wednesday.

The White House Office of Management and Budget recently instructed federal agencies to implement reduction-in-force programs, permanently eliminating jobs in programs that the Trump administration deems wasteful.

“We may do a lot,” Mr. Trump said Tuesday when asked how many workers could lose their jobs in the shutdown.

DOGE estimates that its overall efforts to cut waste, fraud and abuse in government spending have saved taxpayers $206 billion, or $1,279.50 per taxpayer.

Several D.C. agencies and federal worker labor unions declined to comment on the layoffs, noting that they do not track the numbers.

D.C. Chief Financial Officer Glen Lee estimated in March that cutting 40,000 federal jobs would lead to reduced income, decreased housing demand, declining property values, less consumer spending and $1.01 billion in lost revenue for the nation’s capital by 2029.

In a separate report prepared for the D.C. Chamber of Commerce last week, the nonpartisan D.C. Policy Center warned that “job growth has stalled across nearly all sectors,” including professional services such as office work.

It also flagged high office vacancy rates, stagnant nominal office rents and increased hesitation about opening or expanding private businesses in the District.

The D.C. Office of Revenue Analysis said initial unemployment insurance claims are up by 33.7% since last year.

“The region’s sinking, for sure,” Yesim Sayin, the D.C. Policy Center executive director, said Tuesday. “The problem is that we have an economy that relies on the federal government, tourism and universities, and the president’s policies are putting tremendous stress on all three.”