DOGE layoffs may 'overwhelm' unemployment system for federal workers, report finds

cnbc.com:

The Trump administration's purge of federal staff may flood an unemployment benefits system ill-equipped to handle the deluge, triggering delays in aid for jobless workers, according to a new report.

The terminations of federal workers by the Trump administration's so-called Department of Government Efficiency — headed up by billionaire entrepreneur Elon Musk — may ultimately stretch into the hundreds of thousands. That would amount to the largest mass layoff in U.S. history.

The scale of cuts would likely «overwhelm» the Unemployment Compensation for Federal Employees (UCFE) program, the «rarely utilized and creaky» system most federal workers use to claim unemployment benefits, according to a report by The Century Foundation, a progressive think tank.  

The result would likely be longer time frames to collect financial aid that's meant to help workers stay afloat and prevent them from depleting savings as they look for new jobs, said Andrew Stettner, the group's director of economy and jobs, who co-authored the analysis.

«We're already hearing it's taking a long time for people to get their benefits,» said Stettner, former director of unemployment insurance modernization at the U.S. Labor Department during the Biden administration. «And it will probably only get worse.»

The Department of Labor oversees the UCFE program, which is administered by state unemployment agencies.

More than 62,000 federal workers across 17 agencies lost their jobs in February alone, Challenger, Gray & Christmas, an outplacement firm, reported Thursday. By comparison, there were 151 cuts in January and February last year, it said.

Employers have announced almost 222,000 job cuts so far in 2025, the highest year-to-date total since 2009,