The government shutdown is wreaking havoc among federal workers as unemployment claims begin to spike. Data on a Labor Department website, spotted by Bloomberg and NBC News, suggests that over 7,200 federal workers have filed jobless claims amidst the federal shutdown after thousands were fired over the last two weeks. As U.S. jobless claims edge up across public and private sectors, an alarming trend has emerged, with laid-off workers struggling to keep up with their expenses and find work in an economy that reportedly isn’t hiring as quickly as it is firing.
The rising number of federal workers looking for employment is not an unusual turn of events this year, as we’ve witnessed a surge in such cases with the federal downsizing efforts that were kick-started by the Department of Governmental Efficiency (DOGE). While workers remained hopeful that matters would settle down after the initial culling, the cuts are returning once more in October.
Over 7,000 federal workers have reportedly filed unemployment claims as the government shutdown continues into its third week. (Image: Pexels)
Over 7,000 Federal Workers File Unemployment Claims: Understanding The Situation
As a result of the government shutdown, thousands of federal workers have been let go or furloughed until operations at the center resume. The Treasury Department, one of the largest federal employers, announced that around half of its employees have been furloughed, with reporting suggesting that just under 1,500 have been laid off as well. Similar cuts were made at the Health and Human Services (HHS), but a large number of the cuts under the CDC division were also promptly reversed before they could go into effect.
According to the BBC, the Department of Education and the Department of Housing and Urban Development could both lay off 400 employees each, with the Departments of Commerce, Energy, Housing and Urban Development, and Homeland Security also expected to cut between 176 to 315 employees.
There has been considerable uncertainty regarding federal jobs and no answers on just how many will make it out to the end of the shutdown. White House budget chief Russell Vought recently suggested that as many as 10,000 employees could be let go. US District Judge Susan Illston recently granted a request from two unions to block the announced layoffs, which may temporarily protect over 30 agencies from facing any further cuts. It’s unclear if the order will prevent additional layoffs from taking place.
Unemployment Claims from Federal Workers Spike
Data from a Labor Department website, which updates with one-week delays, showed that 7,224 federal workers filed their unemployment claims with the Unemployment Compensation for Federal Employees program specifically for the week that ended on October 11. The program functions as a pathway for federal employees who lost their jobs for “no fault of their own.”
The data also revealed that 3,300 claims were filed in the preceding week, marking the time around when the government shutdown was initiated. In the previous week before the initiation, around 600 claims were filed. With the halting of official reporting on jobless claims due to the federal shutdown, there is much confusion about what the numbers look like across the country.
The US Job Market Has Workers Worried
While the layoff trends suggest that US jobless claims are edging up, estimates from economists at JPMorgan and Goldman Sachs show that new applications for jobless benefits fell in the second week of the month, to a seasonally adjusted 217,000. This is lower than the 226,000 that was reported in the week ending on August 2, when numbers peaked. While there could be a connection with the declining labor supply in the region, the data also suggests that while the job market has slowed, it is also stable.
The “no‐hire no‐fire” trend may not sound convincing to the workers across industries who have been let go this year, but there does appear to be an overall shift towards maintaining numbers. Still, employees remain on edge over the possibility of additional layoffs, making it a key point for HR teams to touch base with them and address their morale. Employees, fearful of the lack of opportunities on the market, are unlikely to quit in large numbers for the remainder of the year, making it an ideal time to build engagement among their ranks.
As for the federal workers filing unemployment claims, the hope remains that they will find the support they need through the unemployment benefits. The likelihood of a reversal of the layoffs is relatively low as the shutdown progresses, however, furloughed employees are still holding on to hopes of back pay once operations resume.
Subscribe to The HR Digest for more insights on workplace trends, layoffs, and what to expect with the advent of AI.