Understanding the Ripple Effects: Federal Workforce Reductions and Their Impact on Veterans
Written By: David Lakin
In 2025, significant changes in federal workforce policy have begun reshaping the employment landscape for both civilian employees and the contractors who support them. The Supreme Court’s recent decision allowing federal agencies to resume large-scale layoffs has paved the way for widespread workforce restructuring, prompting understandable concern—particularly among veterans and transitioning service members.
At Still Serving Veterans (SSV), we are seeing this impact firsthand. As a nonprofit dedicated to empowering veterans and their families through no-cost career services, our mission places us at the intersection of these evolving workforce dynamics and the individuals they affect.
Federal Layoffs: Scope and Trends
Historically, the federal workforce has maintained steady attrition rates. From 2019 to 2023, yearly separations ranged from 100,000 to 150,000 due to retirements, resignations, and limited restructuring. However, 2025 projections estimate up to 275,000 federal positions affected by layoffs, hiring freezes, and attrition strategies—marking a significant departure from previous years.
While the Department of Veterans Affairs (VA) initially considered cutting up to 80,000 jobs, the target was later revised to approximately 30,000, focusing on voluntary exits and unfilled vacancies. A government-wide hiring freeze, extended through October 2025, is further limiting opportunities for advancement or reassignment for federal employees.
Veterans in the Federal Workforce
Veterans comprise 28–31% of the federal civilian workforce—a reflection of longstanding efforts to support veteran employment through programs like Veterans’ Preference and the Veterans Employment Initiative. This means that any significant reduction in federal roles will disproportionately impact the veteran community, whether through direct job loss or constrained access to future positions.
The Contractor Ripple Effect
The impact of these changes isn’t limited to federal employees. Private sector contractors—particularly those serving on the immediate edge of federal operations—have also been affected. Over $70 billion in federal contracts have been paused or canceled as part of the current administration’s workforce and budget recalibrations.
This has led to layoffs across several contracting firms. For example, ABT Global, Inc. laid off 241 employees in early 2025, while Creative Associates International reported similar workforce reductions. In regions with a high density of federal contracts, such as Northern Virginia and Maryland, the economic impact is expected to rival or exceed that of the COVID-19 downturn. In Fairfax County alone, analysts estimate over 56,000 potential job losses when factoring in both federal roles and associated contractors.
For veterans working within federal contracting—many of whom find roles that closely align with their military skills—these developments have introduced a layer of uncertainty that extends beyond current employment to the long-term viability of their chosen career paths.
SSV’s Response: Serving Those Who Have Served
At Still Serving Veterans, we understand the complexity of this moment. Our services are designed to support veterans across all phases of their career journey—whether they are transitioning out of the military, navigating federal employment, or seeking new opportunities in the private sector.
SSV offers:
Personalized career counseling
Federal resume and USAJobs application support
Interview preparation and mock sessions
Assistance with networking and LinkedIn optimization
Guidance navigating job loss and workforce changes
We are also closely monitoring workforce trends and adjusting our services to meet the evolving needs of the veterans we serve.
A Community Committed to Veterans
We remain neutral in the political conversation surrounding these federal changes. Our focus is, and always will be, on ensuring that veterans and their families receive the support they need to build meaningful, sustainable careers after service.
Still Serving Veterans is a 501(c)(3) nonprofit organization. Our work is made possible through the generosity of our community, our partners, and donors who believe that every veteran deserves the opportunity to thrive in civilian life.
If you or someone you know has been affected by federal or contractor workforce changes, please reach out. We’re here to help!
