White House directs agencies to plan layoffs if funding lapses

The White House on Wednesday directed federal agencies to prepare plans for large-scale, potentially permanent layoffs if Congress does not pass new funding by Sept. 30, according to a memorandum from the Office of Management and Budget. The guidance, circulated to agency leadership and general counsels, instructs agencies to draft reduction in force notices for programs whose discretionary funding would lapse on Oct. 1, are not otherwise funded and are not consistent with the president's priorities.

The memo marks a sharp escalation from standard shutdown procedures, which historically have relied on temporary furloughs for nonessential employees who are later returned to their jobs and receive back pay. A reduction in force would eliminate positions rather than merely pause work, potentially producing lasting job losses across parts of the federal workforce. OMB also directed agencies to prepare the usual furlough notifications and to revise any layoff plans once fiscal 2026 appropriations are finalized, with the goal of retaining only the minimum staff required to carry out statutory functions.

The administration framed the move as contingency planning in the event Democrats...