Argentina: Milei Moves to Cut 20,000 State Jobs

President Javier Milei’s government has launched a scheme to eliminate 20,000 more public-sector jobs, adding to the more than 77,000 posts already cut during his administration. The positions won’t simply disappear from payroll: when a worker accepts compensation, the state permanently removes that post from its budget.

“This is not voluntary redundancy, it is coercive dismissal. We totally reject this decree,” Rodolfo Aguiar, general secretary of the ATE state-workers’ association, wrote on X. The union announced a demonstration against the scheme. The name says voluntary. The union says it isn’t.

The terms of the decree

Decree 1203/2026, published in the Official Gazette on Monday, establishes the redundancy scheme and offers eligible employees compensation of up to the equivalent of 25 gross monthly salaries. It covers permanent staff and employees on indefinite-term contracts in the centralised national administration.

Temporary workers and staff at decentralised agencies aren’t eligible. That includes the ANSES social security agency, which has its own scheme. The decree draws lines between jobs covered by the program and those left out, as well as between different parts of the public workforce.

Compensation depends on employees’ age, length of service and pension status. Different arrangements apply to workers nearing retirement. Anyone who accepts the offer can’t return to national public-sector employment for eight years, including through management positions, advisory roles and contracts. University teaching is exempt.

The rule doesn’t stop at the moment an employee leaves. It also restricts routes back into national public employment, while the state permanently removes the post from the budget rather than holding it open for another worker.

The government’s arithmetic

“We continue to look for ways to reduce public spending so we can keep cutting taxes,” Deregulation & State Transformation Minister Federico Sturzenegger wrote in a post on X. His statement links the reductions to the government’s stated aim of cutting taxes.

Figures Sturzenegger released in September showed that 21 percent of jobs in the national public administration had been cut since Milei took office in December 2023. That amounted to 77,500 fewer positions. The article also cites more than 77,000 state workers who had lost posts since December 2023.

Milei’s public-spending cuts have hit the public workforce especially hard. He has branded the campaign the “chainsaw.” The new scheme targets another 20,000 jobs, with compensation conditional on acceptance and each corresponding post permanently removed.

Jobs disappearing beyond the state

Official figures show Argentina has lost as many as 241,000 private-sector payroll jobs since Milei took office. The number of private-sector employers has fallen to 482,000 companies, the lowest level since 2007, according to think tank Fundar.

Sturzenegger pointed to the creation of around 400,000 jobs, but those figures include informal employment and self-employed workers. Informal employment in Argentina has risen by three percentage points over the last three years, reaching around 45 percent. The measures describe a labor market where public posts have been cut, private payroll jobs have disappeared, and a growing share of employment is informal.