Even without taking into account the global economic havoc being wreaked by new tariffs, the Trump administration’s gutting of the federal workforce could have worse impacts on the D.C. region than Covid, Fairfax County authorities say.
A 20% reduction in the federal workforce could devastate the economy in Fairfax County, where approximately 80,000 residents — about 13% of the workforce — are employed by the federal government, according to updated data from the Fairfax County Economic Development Authority (FCEDA).
There are also more than 70,000 workers who live elsewhere but commute to Fairfax County for a federal job, including over 45,000 military, civilian and contractor employees stationed at Fort Belvoir.
The presentation, delivered to the Fairfax County Board of Supervisors at an economic initiatives committee meeting yesterday (Tuesday), offered the clearest look yet at the local ramifications of the sweeping federal workforce and funding cuts implemented since President Donald Trump took office on Jan. 20.
So far, more than 14,000 federal workers have been fired from their jobs, but FCEDA Director of Market Intelligence Stephen Tarditi says that number is likely to rise after a Supreme Court ruling yesterday blocked an order requiring Trump to reinstate 16,000 probationary employees.
Additionally, 86 contractors in Fairfax have had federal contracts canceled — roughly 2.2% of the contractor base.
Tarditi said the FCEDA studied the potential impacts of what 10%, 20% and 30% reductions in the overall federal workforce would look like for Fairfax.
“As we understand it, the target for the reduction from the federal workforce is around 15%, so that’s right around that 20% figure as a middle case,” he said.
A 20% reduction in the federal workforce would amount to an estimated 56,993 job losses among both residents directly employed by the government and private contractors — a scale that might surpass the Covid pandemic, Tarditi said.
“That would account for 9% of our total workforce,” he told the board. “Just to put that in context, at the height of Covid pandemic, our peak unemployment rate was 10.3%. So, if you take our current unemployment rate, around 2.7%, and add that in, that would cross that peak time.”
According to Tarditi, the scale of impacts from a 20% cut in the federal workforce would be unprecedented in Fairfax, with job losses not only hitting federal positions, but contractors and affiliated industries.
“That would put that over 13% job reductions, which we’ve never seen here,” Tarditi said.
Tarditi said a 20% reduction could result in a total output loss of around $20.1 billion or 6% of Fairfax County’s market value or gross domestic product (GDP) — eclipsing the GDP dip from 2019 to 2020.
“We’ve seen the GDP grow year over year [at] 9%,” Tarditi said. “The last time we saw a reduction in GDP was 2019-2020 which was a .1% reduction. We have not seen that pull back, even in a situation like sequestration.”
The downturn would also deliver another hit to Fairfax County’s already-strained budget, with the FCEDA projecting more than $500 million in combined tax revenue losses at the local and state level with a 20% reduction in the federal workforce.
Economic data related to the ongoing federal cuts has been slow to emerge, with furloughed employees holding onto hope that they could go back to work, but alarms are starting to sound. Last week, local contractors Mitre and Leidos both announced layoffs, with the former poised to shed 442 employees in early June.
FCEDA staff warned that the drawn-out process of layoffs means the actual impact might not show up on unemployment data until June, when figures for earlier in the spring and summer are released.
While 20% is higher than the target set by the Trump administration, FCEDA staff warned other factors could push that figure even beyond the 30% cuts analyzed in the report.
Alex Iams, executive vice president of FCEDA, noted that additional cuts to defense industry and homeland security spending could disproportionately affect Fairfax County and “could tip us past the higher end of this scenario.”
Board of Supervisors Chairman Jeff McKay reported on the work of an emergency committee convened by the Virginia House of Delegates to study the impacts of federal workforce and funding reductions. At a meeting in Alexandria yesterday morning, McKay and other Northern Virginia leaders urged state lawmakers on the committee to consider emergency legislation to shore up their region’s economy.
“It’s a lot,” McKay said. “It’s either a lot or more than a lot. I’ve heard Secretary of Labor [Bryan Slater] downplay numbers as if it isn’t a big deal. It’s a big deal. This group is titled the emergency committee. This is an emergency. Let’s not quibble or split hairs over numbers; this is a lot.”
McKay said the additional concern is that the federal government, a partner for Fairfax County during Covid, can’t be relied on for support through this crisis.
“We got through Covid with federal assistance,” McKay said. “We’re not getting that this time.”
While Northern Virginia has a certain kinship with the Hampton Roads area — both federal worker-heavy and likely to suffer disproportionately under the new tariffs — McKay said he felt some frustration trying to get other parts of Virginia to understand the magnitude of what Northern Virginia’s economic peril would mean for the rest of the state.
“It’s very rare that Northern Virginia asks the state for help, it’s Northern Virginia that helps the state,” McKay said. “Now, we could use support. If our economy is challenged, Virginia’s economy is doomed.”
McKay said the chaotic fluctuations from the federal government are likely to create more havoc for months to come.
“It’s really important that people understand that what’s happening right now is deeply chaotic, deeply problematic, and it’s blatantly incompetent,” said Dranesville District Supervisor Jimmy Bierman. “What we’re seeing is the calm before the storm to some degree with this.”
