President Javier Milei’s government published Decree 1203/2026 in the Official Gazette on Monday. It launches a voluntary redundancy scheme aimed at eliminating a further 20,000 public-sector jobs, on top of the more than 77,000 posts already cut during his administration. For taxpayers, the key detail is that every position vacated under the program disappears permanently from the state budget.
The Policy
The decree offers compensation of up to 25 gross monthly salaries. That’s a substantial payout, and the price of a lasting fix rather than a temporary freeze. Once a worker accepts, the government can’t quietly refill the post next year. It’s gone for good.
The scheme covers permanent staff and employees on indefinite-term contracts in the centralised national administration. Temporary workers and staff at decentralised agencies are excluded. That exception includes the ANSES social security agency, which runs its own scheme. Each employee’s payout depends on age, length of service and pension status, with separate arrangements for people nearing retirement.
There’s a catch for anyone who takes the money. Eligible workers who accept the offer can’t return to national public-sector employment for eight years. The ban applies to management positions, advisory roles and contracts. University teaching is exempt.
Government Response
Deregulation & State Transformation Minister Federico Sturzenegger presented the move as part of a broader fiscal strategy. “We continue to look for ways to reduce public spending so we can keep cutting taxes,” he wrote in a post on X.
The figures behind the push are large. Sturzenegger released figures in September showing that 21 percent of jobs in the national public administration had been cut since Milei took office in December 2023. That amounts to 77,500 fewer positions. Milei’s public spending cuts, branded the “chainsaw,” have hit the state workforce harder than almost any other area.
Union Opposition
The ATE state-workers’ association announced a demonstration against the scheme. Its general secretary, Rodolfo Aguiar, rejected the program’s premise outright. “This is not voluntary redundancy, it is coercive dismissal. We totally reject this decree,” he wrote on X.
The decree text described in the source does not mandate dismissal. Participation is an offer, with compensation of up to 25 monthly salaries.
The Jobs Debate
Critics cite the private sector as evidence of the cost. 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 counters that around 400,000 jobs have been created. His figures count informal employment and self-employed workers, a caveat that cuts both ways. Informal employment has risen by three percentage points over the last three years, reaching around 45 percent.
The two sets of figures describe different Argentinas. One is a shrinking formal economy, with fewer registered employers. The other is a labor market that has absorbed workers outside the payroll system.
Why This Matters:
The decree tests whether a government can shrink its own payroll without coercion, using buyouts instead of layoffs. For taxpayers, permanently eliminating budget lines is the central feature: savings that compound rather than reverse. Sturzenegger links the spending cuts directly to future tax cuts, arguing that a leaner state lets citizens keep more of what they earn. Yet private-sector figures point to the risk. Fewer registered employers and a 45 percent informality rate suggest formal job creation hasn’t kept pace. Whether Argentina’s economy turns a smaller state into stronger private hiring will decide if the chainsaw approach builds lasting prosperity or simply moves workers off the books.
- javier milei
- argentina
- public sector jobs
- voluntary redundancy
- federico sturenegger
- ate
- public spending cuts
- state workers