The federal workforce is on the cusp of a dramatic transformation following a newly released memo from the Office of Management and Budget (OMB) and the Office of Personnel Management (OPM). Dated February 26, the memorandum provides a detailed roadmap for implementing President Trump’s “Department of Government Efficiency” Workforce Optimization Initiative. This initiative calls for substantial reductions in force (RIFs) and broad agency reorganizations designed to cut costs, eliminate inefficiencies, and realign government functions.
What’s Happening?
The memo comes in response to President Trump’s February 11 Executive Order, which mandates federal agencies to immediately begin identifying positions for elimination and develop comprehensive reorganization plans. Agencies must submit their initial Agency Reorganization Plans (ARRPs) by March 13, with a follow-up Phase 2 submission by April 14.
The overarching goal? Reduce the size of the federal workforce by cutting non-essential positions, consolidating redundant roles, and slashing real estate footprints. The administration argues that these cuts will lead to better services for the American people while saving taxpayer dollars.
Key Priorities of the Reorganization Plans
Federal agencies have been instructed to focus their reorganization efforts on the following priorities.
- Eliminating non-mandated functions to reduce the number of full-time equivalent (FTE) positions.
- Streamlining agency structures by removing redundant layers of management and consolidating departments.
- Reducing dependency on contractors and external consultants.
- Leveraging technology to automate routine tasks, making agencies more efficient.
- Closing or consolidating regional offices to align with agency return-to-office strategies.
How Will the Government Downsize?
To achieve these sweeping workforce reductions, agencies have been given the following strategies.
- Continuing the hiring freeze outlined in the January 20, 2025, Presidential Memorandum.
- Enforcing a one-out-of-four replacement rule, meaning that for every four employees who leave, only one may be replaced (with OMB and OPM approval).
- Conducting large-scale RIFs for positions deemed non-essential.
- Removing underperforming employees and reassessing probationary hires.
- Allowing term and temporary positions to expire naturally.
- Renegotiating collective bargaining agreements that inhibit efficiency.
- Reviewing regulations that could facilitate faster workforce reductions.
Phase 1 vs. Phase 2 Plans
The restructuring effort is being implemented in two phases.
- Phase 1 (due March 13) focuses on identifying initial cuts, prioritizing service improvements, and analyzing which subcomponents of agencies should be eliminated, consolidated, or expanded.
- Phase 2 (due April 14) provides a forward-looking vision of agency operations post-reductions, including organizational restructuring, job function alignment, and potential relocations of federal offices to lower-cost areas.
What Agencies Need to Do Next
Agencies now have to meet the deadlines for these workforce plans. Each department must complete the following steps.
- Identify competitive areas for RIFs, including jobs that were not classified as essential during government shutdowns.
- Develop strategies to mitigate impact, such as Voluntary Separation Incentive Payments (VSIP) and Voluntary Early Retirement Authority (VERA) programs.
- Submit progress reports to OMB and OPM monthly, beginning May 14, 2025.
- Ensure compliance with statutory authority, avoiding over-interpretation of mandates beyond their explicit requirements.
Exemptions and Special Considerations
Not all federal employees will be affected. The memo explicitly excludes some components of the federal government. It doesn’t mean they won’t see cuts, but it’s not part of this reduction in force.
- Law enforcement, border security, and national security positions.
- Military personnel and uniformed service members.
- High-level political appointees.
- The Executive Office of the President.
- U.S. Postal Service employees.
For agencies providing direct services to citizens (such as Social Security, Medicare, and veterans’ healthcare), workforce reductions will not be implemented until OMB and OPM certify that they will have a “positive effect” on service delivery.
What This Means for Federal Employees
For federal employees, this memorandum adds to the uncertainty and frustrations. Large-scale RIFs and hiring freezes could mean job losses, office closures, and relocations. However, agencies have been directed to provide transition assistance, appeal rights, and placement options for affected workers. Make sure you have your relevant documentation downloaded and ready to be where you need it. Know your rights and connect with others who can support you through any changes.
This is the most aggressive government downsizing effort in years, and its implementation will have far-reaching effects on operations. As agencies scramble to meet the administration’s deadlines, federal workers and stakeholders will be closely watching to see how this unfolds.
