Day 12 Shutdown Update: Layoffs Accelerate, Agency Strain Intensifies

Shutdown Continues

As the government shutdown moves into its twelfth day, scattered but increasingly stark reports of layoffs and staffing reductions are emerging. While few agency-level announcements have been made public, the administration is now executing reduction-in-force plans in multiple departments—amplifying the operational stress that already had agencies operating at a reduced capacity.

Reported Layoffs and Agency Reductions

There is no confirmed public disclosure from the FDA or the USDA detailing a broad, shutdown-driven layoff. However, credible media reporting provides several examples and signals:

• The Office of Management and Budget (OMB) confirmed that “substantial” federal employee layoffs have begun, targeting programs without alternative funding options. (FedNews Network)
• Reports state that at least 4,200 cuts are underway across seven federal agencies as part of the administration’s response to the shutdown. (Government Executive)
• The White House has issued reduction-in-force (RIF) notices in departments including Treasury and Homeland Security. (Al Jazeera)
• The IRS is furloughing nearly half its workforce (approximately 34,000 employees) as a longer-term response to funding gaps. (Reuters)
• Earlier, USDA indicated in its contingency planning that ~42,000 USDA staff would be furloughed under a prolonged shutdown (about half of its workforce). (Farm Policy News)

These actions reflect a shift from short-term operational slowdowns to structural staffing reductions in programs deemed non-core or non-appropriated.

Ongoing Impacts & Emerging Pressure Points

Even without explicit announcements from FDA or USDA, the landscape continues evolving with cumulative pressures:

• Increasing backlog: Delayed reviews, inspections, and rulemakings continue to stack up.
• Contract & grant freeze: Agencies remain unable to initiate new service contracts or internal grant awards, which delays projects in labs, policy units, or external research.
• Regulatory and rulemaking freeze deepens: With Federal Register publishing suspended, new rules, notices, and comment period start dates cannot move forward.
• Reduced advisory and stakeholder engagement: Advisory committees, FDA/USDA workshops, and industry feedback sessions continue to be postponed.
• Heightened legal and compliance risk: As agencies return, they may seek retroactive enforcement on missed deadlines or lapses, particularly where time is at a premium in product approvals or import compliance.

Likely Long-Term Consequences

The longer this shutdown persists, the greater the risk that we will see:

1. Extended timeline recovery: It will take months, possibly quarters, for agencies to unwind backlogs, reassign staff, and restart shelved projects.
2. Policy drift and uncertainty: Deferred rulemaking and guidance will push many regulatory changes past their intended effective dates, leaving regulated industries uncertain of requirements for 2026 and beyond.
3. Resource reallocation & prioritization bias: Agencies may permanently deprioritize certain program areas (e.g. lower-risk compliance, data collection, research) in favor of restoring core safety, science, and inspection functions.
4. Talent attrition and morale damage: Staff who receive RIF notices or prolonged furloughs may leave the public sector, reducing institutional memory and capacity—effects felt long after the shutdown ends.
5. Backlog-induced bottlenecks: Even when funding is restored, agencies will triage urgent work, leaving many lower-priority submissions, import reviews, or regulatory projects waiting further behind.

Links:

• Reuters
• AP News
• Politico