The Trump administration has cut federal government employment to its lowest point in 60 years, reducing the workforce by more than 330,000 positions since taking office—but the dramatic restructuring has produced unexpected costs that offset promised savings.

Historic Government Reduction

Federal employment dropped to 2.67 million workers as of August, down from just over 3 million when President Trump took office in January 2025, according to Bureau of Labor Statistics data. The cuts mark the smallest federal workforce since 1966, achieving a central campaign promise from Trump’s 2024 presidential run. The Department of Government Efficiency, working with the Office of Personnel Management, spearheaded the workforce reduction that targeted what the administration characterized as bloated government bureaucracy.

The Office of Personnel Management projected its Deferred Resignation Program would save taxpayers more than 20 billion dollars annually by allowing employees to leave government service. However, the Government Accountability Office found agencies spent 6.7 billion dollars paying employees who stopped working while still collecting paychecks until their official departure dates. The Partnership for Public Service calculated another 12.1 million dollars went toward rehiring workers previously terminated during the reduction efforts.

Revenue Loss At IRS

Treasury Department watchdogs reported that IRS examination revenue plummeted 35 percent, falling from approximately 10 billion dollars in fiscal 2024 to 6.5 billion dollars in fiscal 2025. The decline coincided with workforce reductions that eliminated nearly 10,000 examination and collection staff positions at the tax agency. Former President Biden had secured almost 80 billion dollars in 2022 for IRS improvements over ten years, including system upgrades and enforcement personnel hiring. The Trump administration has proposed additional IRS cuts for 2027 despite the revenue shortfall.

Uneven Agency Impact

The workforce reductions hit agencies differently across the federal government. The Departments of Education, Agriculture, and Housing and Urban Development absorbed particularly steep cuts, while the Department of Homeland Security maintained staffing levels largely unchanged to support the administration’s immigration enforcement agenda. The BLS employment figures exclude approximately 1.35 million armed services members and roughly 100,000 intelligence agency employees. Despite cutting personnel, the administration spent three percent more on federal salaries during its first year compared to the Biden administration’s initial year in office.

What This Means

Republicans have pledged that if they win the midterm elections, President Trump will distribute 5,000 dollar checks to all adult American citizens. Analysts estimate this promise would cost between 1.2 trillion and 1.35 trillion dollars. The White House declined to comment when contacted about the workforce data and spending figures. Representative Ashley Hinson of Iowa has publicly supported the administration’s efforts to cut taxpayer-funded benefits and codify Department of Government Efficiency reductions into permanent law.