White House threatens layoffs as Trump team recalls fired staff

The White House has told federal agencies to prepare plans for mass layoffs if Congress fails to approve funding by the end of the month — a sharp escalation in the budget standoff that risks triggering a government shutdown next week. At the same time, the Trump administration is quietly reinstating hundreds of employees it had previously dismissed, exposing contradictions in its management of the federal workforce.

Politico first reported that the Office of Management and Budget (OMB) sent a memo late on Wednesday directing agencies to draft “reduction-in-force” notices. CBS News said the guidance extends beyond temporary furloughs — the common response in a shutdown — and explicitly raises the prospect of permanent layoffs for staff in programmes either unfunded after 1 October or deemed “not consistent with the President’s priorities.”

“Programmes that did not benefit from an infusion of mandatory appropriations will bear the brunt of a shutdown, and we must continue our planning efforts in the event Democrats decide to shut down the government,” the memo states.

The federal fiscal year ends on 30 September. Without a new budget, agencies would begin closing down operations from Wednesday. In past shutdowns, workers were either told to stay home without pay or asked to continue in critical roles until Congress reached a deal, with back pay issued later. Permanent job losses, however, have been rare.

An OMB official clarified that statutory programmes such as Social Security, Medicare, veterans’ benefits, military operations, immigration enforcement, law enforcement and air traffic control would continue regardless. But the guidance has alarmed current and former officials who warn of lasting damage if layoffs go ahead.

Bobby Kogan, a former OMB adviser during the Biden administration, called the plan “an action of enormous self-harm inflicted on the nation, needlessly ridding the country of talent and expertise.” He added that it amounted to extortion: “Give us what we want in a funding fight, or we’ll hurt the country.”

Democrats seized on the memo as evidence of intimidation. Senate Minority Leader Chuck Schumer said it reflected President Trump’s long-standing hostility to the federal workforce. “Donald Trump has been firing federal workers since day one — not to govern, but to scare,” he said.

House Minority Leader Hakeem Jeffries echoed the criticism on X: “We will not be intimidated by your threat to engage in mass firings. Get lost.”

Meanwhile, negotiations remain deadlocked. A Republican-backed short-term funding bill cleared the House but lacks support in the Senate, where seven Democratic votes are required to overcome the filibuster. Democrats are demanding a rollback of this year’s Medicaid cuts and an extension of health insurance tax credits as part of any compromise.

President Trump cancelled a planned meeting with Democratic leaders on Tuesday, dismissing their proposals as “unserious and ridiculous.”

Rehiring After Cuts

Even as OMB urges agencies to ready pink slips, other parts of the administration are reversing earlier workforce reductions. The General Services Administration (GSA), which manages federal buildings and leases, has told hundreds of employees dismissed in an earlier cost-cutting drive to report back to duty from 6 October, according to the Associated Press.

The decision reflects the strain created by the Department of Government Efficiency (DOGE), led by Elon Musk, which had slashed GSA’s staff and cancelled leases in a bid to save money. But the cuts left the agency “broken and understaffed,” said Chad Becker, a former GSA real estate official. He added that the sudden reversal shows the administration “went too far, too fast.”

DOGE had boasted that its cancellations would save $460 million, but internal figures cited by officials now put expected savings at $140 million. Meanwhile, the sharp reduction in personnel meant 131 leases expired without the government leaving the properties, exposing agencies to costly penalties from landlords.

Representative Greg Stanton, the senior Democrat overseeing the GSA, said there was “no evidence” the cuts had delivered savings. “It’s created costly confusion while undermining the very services taxpayers depend on,” he told AP.

The Government Accountability Office is now reviewing the GSA’s actions, including workforce reductions and lease terminations, with findings expected in the coming months.

The juxtaposition of OMB planning for mass layoffs while the GSA scrambles to rehire staff underscores the volatility of the administration’s approach. While the White House frames the threat of cuts as leverage in the budget fight, agencies are already dealing with the fallout from earlier purges.

For federal employees, the message is mixed: prepare for pink slips while some colleagues are recalled after months of paid idleness. For taxpayers, the result is confusion and cost overruns rather than efficiency.

With only days left to avoid a shutdown, the immediate question is whether Congress can reach agreement. But the deeper uncertainty concerns the administration’s long-term direction — whether its goal is to streamline government, or simply to keep its workforce in a state of perpetual upheaval.