Another decision reversed, the IRS halts layoffs and announces plans to rehire workers. Earlier this year, the IRS aimed to cut its workforce from 100,000 employees to a smaller workforce of 60,000 workers, keeping in line with the administration’s desire to downsize the organization. Over 6,700 workers were let go in February, primarily those in the tax compliance unit, and it was suggested that more workers would be let go.
Now, the IRS is asking fired employees to return, reversing its layoff plans to better prepare for the upcoming tax season. While cuts at agencies like the CDC are proceeding, other federal agencies have attempted to dial back the damage of the cuts that were rushed across their departments earlier this year.
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IRS Halts Layoffs, Critical Vacancies Need to Be Filled Back Up
The Internal Revenue Service in the US has cancelled its layoffs to some degree and is now inviting workers who accepted deferred resignations back into its fold. Following the “Fork in the Road” memo sent out in January this year, many workers across federal agencies had opted to step down from their jobs voluntarily in exchange for their full salary for the next six months. The deferred resignation program offered employees a chance to take temporary paid leave from their roles before completing their resignation and leaving permanently at the end of the specified period.
The administration, along with the non-governmental body DOGE, had previously attempted to clear out the government of redundant workers and downsize its overstaffed workforce in order to redirect resources to other areas of governmental expenditure. Part of the goal was to bring down the IRS headcount below 60,000, but it is unclear if this continues to be a priority despite talk of rehiring workers.
With staffing gaps now causing concerns, the IRS layoff plan has been halted to reassess the situation. Next year’s tax season is fast approaching, and the agency will require its teams to be adequately staffed to handle the processing that will soon need to be conducted. With many new changes introduced through the “One Big Beautiful Bill,” there may be additional considerations that employees will need to be prepared for, which cannot be perfected on short notice.
The IRS Is Rehiring Employees to Address Its Staffing Shortage
“The IRS has identified areas where staffing reductions created a potential gap in mission-critical expertise,” a top executive at the agency told IRS employees in an email, which was acquired by Government Executive. “As a result, IRS will utilize all available tools—including details, reassignments, DRP/TDRP (Deferred Resignation Program/Treasury Deferred Resignation Program) rescissions, and external hiring—to identify resources to fulfill the mission-critical skill sets,” the email continued.
Around 26,000 employees reportedly left the IRS during the period when active cuts were being conducted, alongside the two rounds of deferred resignations. Employees who accepted the deferred resignations now have the opportunity to consider returning to their roles. Those who do not return will not face any punishment for their decision to separate from the agency permanently.
As the IRS Reverses Layoffs, There Is Considerable Uncertainty Among Workers
The IRS’ decision to halt and reverse its layoffs is more complicated than merely asking workers to return to their desks. The Government Executive also reported that the changes to the IRS have had far-reaching effects on employees. Around 50 staff members from the IRS Taxpayer Experience Office were recently informed of the halting of the IRS’ layoff plans. This comes after they had been given notice of cuts back in April and were expecting to lose their jobs. The layoffs were held off due to legal action, keeping employees on the payroll without allowing them to work.
Additionally, some workers returning to their posts no longer have their old offices to return to, while others are being reassigned to report to a different leader. The agency has also reportedly changed the function of many managers. Management staff have been asked to enter the field as revenue agents, as there were too many managers compared to the number of agents that needed managing. The effects of being short-staffed can be equally unpleasant for everyone involved.
Rushed Layoffs Are Bad for Business
With the IRS rehiring employees and posting about new job openings across the organization, the agency may be able to fill the gaps in its workforce before the full force of the next tax season hits. Despite the early start to their rehiring efforts, there is evidence to suggest that the initial layoff plans didn’t receive the degree of planning and forethought necessary before such sweeping decisions were made.
Many workers will be keen to return to their roles, but there are likely to be an equal number of them who have another work opportunity queued up to take on. While the deferred resignation program allowed many to continue to receive employment benefits through this period of uncertainty, the frustrations about the future of their jobs have continued to mount. Lack of clarity can turn into a breeding ground for resentment, and this is often made worse when employees have to gather conflicting updates about the fate of their roles through the news or social media.
Organizations that have planned their own layoffs this year can benefit from taking more care in the cuts that are conducted. This is important not in ensuring that the cuts are unavoidable, but also for planning which employees are to be affected to cause minimum disruption to the organizational goals. Consideration is equally necessary in planning how workers are supported on their way out. Instability and confusion are not ideal pillars to build a thriving workforce, more so when the affected workers deal with sensitive tasks that require the utmost care and attention.
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