Trump is razing the federal workforce. What will that do to D.C.?

We’re in the fourth week of Donald Trump’s second term, and it’s clear the president remains intent on keeping his campaign promise to gut the federal workforce. Around 75,000 federal workers have accepted Elon Musk’s “fork in the road” buyout (which a judge allowed to proceed on Wednesday) and the Office of Personnel Management has initiated extensive layoffs that the administration hopes will help them cut agency budgets by 30 to 40%. On Tuesday, the president issued an executive order requiring federal agencies to work with the U.S. DOGE Service to slash their workforce and limit hiring.

The chaos and potential for job losses keep ballooning: Musk and DOGE have slashed contracts at the Department of Education, reduced spending on critical grants through the National Institutes of Health, suggested that the Consumer Financial Protection Bureau should be dismantled, gained access to sensitive information at the U.S. Treasury and the Federal Aviation Administration, and of course taken aim at USAID, saying the agency should be completely dismantled.

In the middle of the whirlwind, many workers in D.C. are living in fear of what comes next. Employees have been fired or are waiting for potential termination notices; whole industries are under threat of being dismantled; and the local economy is bracing for a hit. 

“This is like Detroit and the closing of the major car plants,” says former USAID contractor and Ward 5 resident Van Credle, referencing the mass unemployment caused when a car manufacturing plant closes in a city dependent on the industry for jobs. Credle is one of eight federal workers who spoke to The 51st for this story, most of whom asked to remain anonymous to preserve future job prospects. 

“Every person I know at every job I've ever had has been fired or furloughed or is waiting for the axe to fall,” says one Ward 1 resident who works in the international development industry and asked to remain anonymous for fear of professional consequences. She was recently terminated from her position as a USAID contractor. “I don't anticipate that other industries in D.C. are ready to absorb the workers. I just can't imagine that D.C. is ready.”

There are some indications that the local economy has already started feeling the pressure: Unemployment data from the week ending on Feb. 1, after Trump’s initial federal hiring freeze, showed 1,408 unemployment claims had been filed — up from 768 the week before. 

Federal workers account for approximately 9% of the regional workforce, likely higher in D.C. proper — the D.C. Office of Revenue Analysis reported federal wages constituted over 27% of all D.C. wage and salary income as of December 2024.

If the cuts to federal programs are as extreme as what has been proposed, “we could see unemployment in the District skyrocket,” said DC Fiscal Policy Institute Executive Director Erica Williams. “That will put pressure on our budget as we have to provide unemployment benefits, and it'll be downward pressure on our economy as folks just have less to spend.”

Former USAID contractor Caitlin Thistle says she and her family started bracing themselves for a potential furlough or firing in January. Late that month, she sat down and made a list of everything she’d cut from her budget, including donations to her church and child care payments. By noon the following Tuesday, she had been officially laid off.

“We have also told ourselves no more alcohol, no more eating out – things that are luxuries,” she tells The 51st.

Another USAID contractor, this one in Ward 3, spoke about the conversations she has had with others in her social circle. She spoke on the condition of anonymity because she feared speaking publicly would hurt her future job prospects. 

“I'm not eating out at all. I've told friends, if you want to get together, you can come to my house. I'll come to your house. I'm not going out to restaurants. I'm not doing takeout. I'm going to the grocery store to buy food,” she says.

She received a termination notice on her birthday. “It happened very quickly, much faster than any of us thought,” she says. “We thought we might be furloughed, but we might be given a chance to come back and work again. But it was pretty definite when they sent that layoff letter that they don't intend on bringing that back.”

These workers are just two of many who may suddenly find themselves less inclined to spend their dollars at D.C. establishments.

“It's not just job losses,” says Williams about the economic consequences of gutting the federal workforce. “There are ripple effects. So when we have folks who can't contribute as much to the economy as they used to, it affects the businesses that rely on people going out to eat or being patrons at their stores. And then they may in turn have to cut back on their employment.”

Terry Clower, a professor at George Mason University who tracks the local economy, put it in even starker terms to Washingtonian: “A federal job means more than just a federal job. On average, for every job in the federal government, you explain two to three jobs in the regional economy.” Forty percent of the local economy is based in one way or another on the federal government, Clower told the outlet, including contractors adjacent to federal work like Lockheed Martin and General Dynamics. The salaries from these jobs also keep the local real estate market going.

A population shift?

The District has one of the highest densities of federal workers in the country, and it’s also one of the most expensive areas to live. The median rent in Washington, D.C., is just under $2,000, and the median home sale is $733,536 — both above the national median, according to US News.

The federal workers we spoke with reported that their spending habits changed immediately after losing their jobs (or before that). Most agreed, however, that they wouldn’t leave the city unless they absolutely had to, but they’re increasingly afraid they or their colleagues will have to — particularly those with no family in the area or who were earlier in their careers.

“The scary part is, like, will I be able to find a job here that can sustain me here?” asked the Ward 3 resident. “My desire is definitely to stay here if possible, but I've been forced to think about other options: Six months or a year from now, if I don't have a solid job here, I'll probably have to leave.” 

It may also be difficult to actually track population shifts accurately and in real-time, according to Williams.

“We'll see what happens with our ability to track [population] data like that over time, given how much data we've seen pulled off of government sites,” Williams says, referencing the Trump Administration’s attempts to remove public research information from government pages. “Census data that give us population counts only happen every so often, and it's always a lag … So we won't know for a while the impact of all this on our population.”

Even with the prospect of a difficult economy looming, residents aren’t willing to give up that easily. 

“I want to stay in D.C.,” Credle says. “D.C. in its best of times, is a place that welcomes everybody. And I want it to continue to be that.”

Turn towards mutual aid

Whether in response to a pandemic, immigration, or the rising cost of living, the region has a tradition of turning to mutual aid organizations for support. 

Since many employees lost their colleagues’ contact information when they lost access to their professional email, grassroots networks have been popping up in their place: shuttered offices connecting other shuttered offices across the region as former federal workers organize in-person meetups or protests.

Local workers are also setting up a new mutual aid program to distribute funds based on the monthly federal poverty level for their household size, according to information in a Google document obtained by The 51st. Organized on encrypted messaging platforms like Signal, others are volunteering their time — whether it’s a yoga instructor hosting a free class for impacted workers, a counselor offering free sessions, or career coaches reviewing a stranger’s job materials for free. 

It’s perhaps unsurprising for a group of workers intently focused on public service. Each worker who spoke to The 51st for this story was deeply concerned about the effects that these cuts will have nationwide and abroad. 

“It’s easy to think ‘it's just foreign aid, that's other people,'" says the Ward 1 resident who recently lost her contracting job at USAID. “But it really does have a major impact on our lives here. If I were at work right now, I'd be working on the Ebola outbreak in Uganda and the Marburg outbreak in Tanzania. It's not a distant thing.”