Milei's State Cuts Target 20,000 More Workers

President Javier Milei’s government has launched a voluntary redundancy scheme aimed at 20,000 additional public-sector jobs, following cuts to more than 77,000 state posts during his administration. The workers’ association ATE called the measure “coercive dismissal” and announced a demonstration against it. Jobs held by workers who accept compensation will disappear permanently from the state budget.

Workers Face the Offer

Decree 1203/2026, published in the Official Gazette on Monday, offers eligible employees compensation of up to 25 gross monthly salaries if they leave. The amount varies by age, length of service and pension status, with separate arrangements for employees nearing retirement.

The scheme applies to permanent staff and employees on indefinite-term contracts in the centralised national administration. It excludes temporary workers and employees at decentralised agencies; the ANSES social security agency runs its own scheme.

Workers who take the offer can’t return to national public-sector employment for eight years. The ban covers management positions, advisory roles and contracts, but exempts university teaching.

“This is not voluntary redundancy, it is coercive dismissal. We totally reject this decree,” ATE general secretary Rodolfo Aguiar wrote on X. The state-workers’ association said it would demonstrate against the scheme.

The Government's Spending Policy

Deregulation & State Transformation Minister Federico Sturzenegger said the government wanted to cut public spending further. “We continue to look for ways to reduce public spending so we can keep cutting taxes,” he wrote in a post on X.

Milei’s public-spending cuts, which he has branded the “chainsaw,” have hit the public-sector workforce particularly hard. 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 meant 77,500 fewer positions.

The report also counted more than 77,000 state workers who had lost their jobs since December 2023. The new scheme targets another 20,000 jobs, adding to the reductions already made.

Employment 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 dropped to 482,000 companies, its lowest level since 2007, according to think tank Fundar.

Sturzenegger cited the creation of around 400,000 jobs, though his figures include informal employment and self-employed workers. Informal employment in Argentina has climbed by three percentage points over the last three years, reaching around 45 percent.

The decree permanently removes posts from the state budget when eligible workers leave, while limiting their return to national public-sector work. The government says spending cuts will let it cut taxes further; the union has rejected the scheme and announced a demonstration.