Mass layoffs in the US? Trump may take extreme route if talks to end govt shutdown fail

The White House may resort to mass layoffs of federal workers as the partial government shutdown enters its fifth day, according to a senior official. The shutdown began on October 1, marking the start of the federal fiscal year 2026, after Senate Democrats rejected a temporary funding measure. 

The administration has connected the threat of layoffs to the lack of progress in negotiations between President Donald Trump and congressional Democrats. When questioned about the timeline for layoffs, President Trump stated, "It's taking place right now." The Office of Management and Budget, which has played a central role in the administration's efforts to reduce the size of government, did not comment immediately.

White House National Economic Council Director Kevin Hassett told CNN's ‘State of the Union’ programme that the administration is still hoping for a resolution but has made preparations if an agreement is not reached. "President Trump and Russ Vought are lining things up and getting ready to act if they have to, but hoping that they don't," Hassett said. The potential for federal employee layoffs has been linked to the ongoing funding deadlock and the administration's broader agenda to pare down government operations.

There is no indication of progress in discussions between congressional leaders since President Trump last met with them. Senate Democratic leader Chuck Schumer commented on the impasse, stating, "They've refused to talk with us," during an appearance on CBS' ‘Face the Nation’. 

Democrats are seeking a permanent extension of enhanced premium tax credits under the Affordable Care Act and assurances that the White House will not attempt to unilaterally adjust spending agreements. Senate Majority Leader John Thune has expressed willingness to discuss Democratic concerns, provided that the government is reopened first.

Healthcare remains a point of contention, with President Trump reiterating the administration's focus on reforming the Affordable Care Act, also known as Obamacare. "We want to fix it so it works. Obamacare has been a disaster for the people, so we want to have it fixed so it works," the president said. Informal negotiations between rank-and-file members of both parties have continued, but Democratic Senator Ruben Gallego noted efforts have yielded little progress.

The Senate is scheduled to vote again on Monday on a stopgap funding proposal that has already cleared the Republican-controlled House of Representatives, as well as a Democratic alternative. Neither measure is expected to secure the 60 votes required to advance. Republican leaders have called on Democrats to support reopening the government.