Shutdown Crisis: Why US Government Workers Now Face Threat Of Mass Layoffs?

Last Updated:October 02, 2025, 17:11 IST

The US federal government shutdown enters day two, with Donald Trump warning of imminent permanent layoffs.

US President Donald Trump (Image Credit: Reuters)

The US federal government has now entered its second day of shutdown, the first in nearly seven years, throwing hundreds of thousands of federal employees into uncertainty. While shutdowns have traditionally meant temporary furloughs with back pay later, the Donald Trump administration is signaling something different this time: permanent job losses could follow within days.

What White House Is Saying On Layoffs?

White House Press Secretary Karoline Leavitt said mass layoffs of federal workers were “imminent,” suggesting they could begin in “two days, very soon.” US Vice-President JD Vance warned that if the shutdown drags on, “we are going to have to lay people off” while US President Donald Trump called the shutdown an “opportunity” to make irreversible cuts as he urged Republicans to “clear out dead wood, waste and fraud,” arguing that “billions of dollars can be saved.” The remarks represents a sharp break from past practice, in which furloughed workers- those deemed “non-essential”- were later paid for lost time.

How Many Jobs Are At Risk?

Experts estimate that roughly 40% of the federal workforce- about 750,000 people- could be furloughed if the shutdown continues. In previous shutdowns, these workers were sent home temporarily without pay but later received retroactive compensation when the government reopened. However, with the White House now openly discussing permanent cuts, fears are growing that many of these jobs could disappear altogether. Russell Vought, Trump’s budget chief, has reportedly briefed Republicans behind closed doors about possible layoff plans.

Why Is US Government Shut Down?

The shutdown began when US Congress failed to pass a new spending plan by Wednesday’s deadline. Republicans, who control both chambers but lack the 60 Senate votes needed to pass a funding bill, are pushing for a stopgap measure to keep the government open until mid-November.

Democrats, however, are demanding guarantees on healthcare funding, particularly for low-income Americans, before agreeing to any deal. Senate Majority Leader Chuck Schumer accused Republicans of trying to “bully” Democrats while Republicans insist Democrats are “holding the American people hostage” for political gain.

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