The Trump administration has cut the federal workforce to its smallest size in 60 years, dropping employment from 3 million to 2.67 million workers, but the savings come with significant costs including a 35% plunge in IRS tax collection revenue.

Historic Workforce Reduction

Federal employment has reached its lowest point since 1966, with 330,000 positions eliminated during Trump’s first year in office. The Office of Personnel Management projects the Deferred Resignation Program alone will save over $20 billion annually. However, the Government Accountability Office found agencies spent $6.7 billion paying employees who stopped working while still collecting paychecks until their official departure dates. The Partnership for Public Service estimates another $12.1 million went to rehiring previously fired workers.

Despite these workforce reductions, the Trump administration spent 3% more on federal salaries during its first year compared to Biden’s initial year in office. The cuts targeted specific agencies, with the Departments of Education, Agriculture, and Housing and Urban Development facing the steepest reductions. The Department of Homeland Security maintained its headcount to execute immigration enforcement priorities.

IRS Revenue Collapse

The Internal Revenue Service bore the brunt of cuts, losing nearly 10,000 examination and collection staff members. Revenue from IRS examinations plummeted from $10 billion in fiscal 2024 to $6.5 billion in fiscal 2025, a 35% decline. President Biden had secured nearly $80 billion in 2022 to upgrade IRS systems and hire enforcement personnel over 10 years. The Trump administration now proposes additional IRS cuts for 2027, potentially reducing tax collection capabilities further.

Campaign Promise And Future Plans

Reducing federal workforce size represented a major 2024 campaign pledge, with Trump vowing to eliminate government bloat. The Department of Government Efficiency and Office of Personnel Management spearheaded the reduction effort. Trump has promised $5,000 checks to all adult American citizens if Republicans win the midterm elections, though this proposal would cost between $1.2 trillion and $1.35 trillion. The workforce numbers exclude roughly 1.35 million armed services members and approximately 100,000 intelligence agency employees. The White House declined to comment when contacted about the reductions and their impacts.