Mass Federal Layoffs: There’s a Better Way

President Donald Trump’s Office of Personnel Management is intent on reducing headcount across the federal government. Having nearly exhausted easy-to-use tools like cutting probationary workers and offering generous buyouts, OPM is now rolling out the most potent tool at its disposal: Reductions in Force, or RIFs.

RIFs are mass layoffs, invoked when agencies undergo large-scale restructuring. In February, Office of Management and Budget director Russ Vought and OPM acting director Charles Ezell ordered agencies to begin planning for large-scale layoffs using RIFs. Some agencies, like the Department of Health and Human Services, have already executed RIFs, while others including the Departments of Interior and Transportation and the Environmental Protection Agency, are planning to implement them in the coming weeks and months.

The administration’s stated goals for reforming and shrinking the federal civil service include “increased productivity” and “better services for the American people.” But without deep reforms to the process that governs Reductions in Force—especially increasing its focus on retaining high-performing employees—these and subsequent rounds of mass layoffs will cut the very staff the administration needs to build a leaner, more effective federal government.

Federal agencies have wide latitude to invoke RIFs, including for planned reorganizations, budget cuts, or lack of work. But existing OPM procedures limit agency leeway in determining which specific employees are retained and which are dismissed. The existing rubric scores employees on four factors: tenure of employment (permanent, probationary, temporary, etc.); veteran status; length of federal service; and recent performance reviews—in that order. Those with the highest total scores are prioritized for retention or reassignment to other federal jobs, while the lowest scorers are let go.

In practice, the RIF process overwhelmingly prioritizes the most senior and longest-tenured employees over top performers.

Consider two hypothetical, non-veteran employees subject to a RIF. The first, Rick, has 15 years in the federal service and three recent performance ratings of “fully successful,” which is level three on the five-point scale used by many federal agencies. The second, Jane, has only five years of federal employment but has three consecutive “outstanding” performance reviews, the highest level.

Under current rules, Rick’s performance reviews would add 12 “years” to his length of service for the purpose of RIF prioritization, while Jane’s would add 20, leaving them with 27 and 25 “years” respectively. Rick, the lower-performing but longer-tenured employee, would then be protected at the expense of Jane, a top performer, who may be demoted or laid off.

Without reforms, even the mere threat of arbitrarily broad Reductions in Force may cause more effective, top performers to leave voluntarily rather than more senior, lower performers. Top-performing employees with many outside options in other sectors or other levels of government have the best reason to jump ship.

This dynamic can be worsened by the administration’s “carrots and sticks” approach, with cash bonuses for employees to leave reinforced by the additional threat that workers may be fired later. These bonuses may cause an exodus of younger—potentially better—employees from the civil service while not substantially altering the decisions of older workers, for whom layoffs are not nearly as threatening. Absent reform to the “sticks” the administration uses to cut staff, in other words, even the “carrots” may not work as intended.

If the OPM’s goal is to remove expensive, unproductive federal employees and build a leaner, more technically savvy federal workforce, the current procedures governing Reductions in Force are counterproductive. In a striking example, hundreds of AI experts hired by the last administration have already been let go, despite the president’s commitment to artificial intelligence. Large-scale RIFs across agencies will undoubtedly ensnare more AI-focused staff, software engineers, and other technical personnel.

Congress can and should intervene to refocus future RIFs on merit. There is a recent precedent for reform. In the 2016 National Defense Authorization Act, Congress directed the Department of Defense to reform its RIF procedures for civilian employees so that “the determination of which employees shall be separated from employment in the Department shall be made primarily on the basis of performance.” The department implemented new RIF rules in early 2017. Over the coming months, Congress can issue simple instructions for other agencies across the federal government to do the same.

Those who take seriously the challenge of rebuilding state capacity should embrace RIF reform regardless of their preferred federal workforce size or their views on the administration’s personnel policy so far. Future administrations, Republican or Democratic, will use Reductions in Force to restructure and make cuts to federal agencies. As the bluntness and clumsiness of initial personnel cuts over the last few months has demonstrated, better to be equipped with tools actually designed to build a more effective, competent bureaucracy.

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