The White House has begun laying off thousands of federal employees as the U.S. government shutdown enters its third week, marking a significant escalation in the ongoing budget standoff.
More than 4,000 federal workers across key agencies, including Treasury, Health and Human Services, Commerce, Education, and Homeland Security, have received formal termination notices, according to internal government data seen by Reuters.
The Centers for Disease Control and Prevention is also affected as agencies adjust operations under limited funding.
The layoffs represent a shift from the traditional use of temporary furloughs during funding lapses to what officials describe as a reduction in force, a permanent downsizing measure triggered by prolonged fiscal uncertainty.
The shutdown, which began on October 1, 2025, followed the failure of Congress and the administration to reach an agreement on new spending legislation. Nearly 900,000 federal employees have been furloughed or are working without pay, while public services and routine operations continue to scale down nationwide.
Departments with the largest payrolls, such as Treasury and Health and Human Services, account for the bulk of the cuts. Officials say available contingency funds have been exhausted, forcing agencies to restructure staffing until a budget resolution is reached.
The Office of Personnel Management has warned that additional layoffs may be necessary if the funding impasse persists beyond October. Agencies have been asked to identify non-essential positions that could be permanently eliminated should the shutdown continue.
According to Reuters, early assessments within federal agencies indicate that the combined impact of furloughs and layoffs could weaken administrative efficiency, delay critical programs, and strain recovery once funding is restored.
Analysts warn that extended disruptions could also dampen consumer spending and broader economic growth.
The move has drawn criticism from labor unions and public policy groups who argue that mass layoffs during a funding lapse breach long-standing employment protections. Legal challenges are expected in the coming weeks as unions seek injunctions against the dismissals.
While the administration maintains the reductions are necessary to manage limited resources, critics warn the approach risks turning a temporary budget impasse into a lasting institutional setback for the federal workforce.
