How Federal Layoffs Are Impacting the Veteran Workforce
The ripple effects of widespread federal layoffs are being felt across the country—and are impacting our nation's veterans acutely. As departments restructure and budgets tighten, thousands of roles traditionally held by veterans are being eliminated, disproportionately impacting a workforce already facing unique employment challenges.
As veterans navigate an increasingly uncertain job market, businesses have a critical opportunity to offer meaningful employment pathways that not only support these skilled individuals but also strengthen their own organizations.
Why Federal Layoffs Are Hitting Veterans Hard
Veterans have long found a strong employment foothold within federal agencies and defense-related sectors. These roles are not only aligned with their experience and skill sets, but also typically offer stability, benefits, and a sense of continued service. Pew Research reports that over 700,000 veterans were employed by federal departments and agencies as of September 2024, making up nearly a quarter of the federal civilian workforce.
In addition to slashes to federal funding that supports critical services and resources for the veteran community, including VA health services, research, and the Veterans Crisis Line, the recent wave of federal layoffs has majorly impacted veteran employees. Within the first five weeks of federal layoffs, nearly 16% of the 38,000 fired from the federal workforce were veterans.
Recent layoffs are impacting the veteran unemployment rate, which rose to 4.0%, up from 3.8% in January and significantly higher than the 2.8% rate from a year ago (U.S. Department of Labor).
Which Industries Are Seeing the Most Veteran Layoffs?
The impact of federal restructuring is being felt across multiple sectors where veterans are heavily represented—defense, cybersecurity, logistics, law enforcement, and administrative roles. The Department of Veterans Affairs, for example, recently announced the dismissal of over 1,400 employees in non-mission critical roles, with funds being reallocated to direct services for beneficiaries (VA News).
Fortunately, the core skills veterans bring to the table are incredibly transferable. Leadership, resilience, problem-solving, adaptability, and a team-first mentality are just a few of the traits employers value—traits that veterans have in spades. Many also possess years of experience that can far outpace other entry-level candidates. With proper guidance and opportunity, veterans can pivot successfully into roles in tech, project management, operations, and beyond.
Long-Term Implications for Veteran Employment
The recent wave of federal layoffs could have significant long-term implications for the veteran workforce. The reduction in federal employment opportunities may hinder economic stability for veterans and disrupt access to essential services and benefits often facilitated through federal employment. The erosion of institutional knowledge and leadership veteran employees often provide could negatively impact agency performance over time.
The current wave of federal layoffs presents a challenge—but also an opportunity for the private sector, which stands to benefit from the influx of highly skilled veteran workers now on the job market. For businesses, this is a moment to hire not just out of responsibility, but out of recognition of the immense value veterans bring.
The circumstances and implications of federal layoffs and budgetary cuts is fluid, in flux, and requires both employers, veterans, and the broader workforce to keep an eye on the situation as it develops.
To better navigate the challenges and opportunities posed by federal layoffs, join American Veterans Group’s virtual panel, VetSuccess: Serving the Displaced Federal Workforce, on May 20, 2025 1:00-2:00 pm ET.
