IRS Layoffs 2025 - Civil Rights Office Layoffs Reversed Amid Ongoing Workforce Cuts

The IRS has rescinded layoffs at its civil rights office, but broader workforce cuts and hiring challenges continue to shape the agency’s future in 2025.

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The IRS has walked back planned layoffs at its Office of Civil Rights and Compliance one of the first divisions targeted in the agency’s sweeping 2025 workforce reduction plans.

In an Aug. 1 memo obtained by Federal News Network, IRS Commissioner Billy Long told affected staff their reduction-in-force (RIF) notices from April are officially canceled.

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“This memorandum serves as cancellation of your prior RIF notice of separation,” Long wrote. “It supersedes any previous notices you may have received … I look forward to your continued employment with the Internal Revenue Service.”

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The reversal impacts employees at the civil rights office formerly the Office of Equity, Diversity and Inclusion where about 80% of its 176 staff received RIF notices earlier this year.

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Layoffs on Hold After Court Battles

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Originally, about 80 employees were slated to leave by June 3, but a federal judge in San Francisco temporarily blocked many agency RIFs. While the Supreme Court later allowed those plans to move forward, the IRS kept its own layoff process paused for weeks.

“We were past the date of being RIF’d, and no one knew what was going to happen next,” one IRS employee told Federal News Network. “We’ve been waiting these couple of weeks to find out.”

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Roughly half of those who got RIF notices had already opted into the Deferred Resignation Program (DRP) or other voluntary separation incentives. Long confirmed that employees who accepted DRP, voluntary early retirement (VERA), or voluntary separation incentive payments (VSIP) worth up to $25,000 will not have their RIF notices rescinded.

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Union Pushback and Ongoing Negotiations

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The National Treasury Employees Union (NTEU) filed a grievance in May, challenging the IRS’s refusal to let employees withdraw resignations or DRP agreements. The union later expanded its case to include those wanting to back out of VERA and VSIP as well.

NTEU expects a formal response from the IRS by Aug. 7.

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Workforce Shrinking Despite Cancellations

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Under the Trump administration, the IRS has lost over 25% of its workforce through a mix of layoffs and voluntary separations. Earlier this week, the agency posted and then abruptly canceled 4,500 customer service representative positions on USAJobs.

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As part of its fiscal 2026 budget request, the IRS says it needs to hire 11,000 call center representatives just to maintain current service levels. Without the funding, officials warn they could answer as little as 16% of taxpayer calls during next year’s filing season.

The request also includes $852 million for staffing and automation tools to better serve taxpayers. Currently, the IRS handles about 100 million calls annually.

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Leadership Challenges Within the IRS

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The Professional Managers Association (PMA), which represents IRS managers, says morale at the leadership level is at a historic low. Some managers have voluntarily downgraded to non-management roles, citing high stress and low compensation for the workload.

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“In the association’s history, this is the most dire leadership environment the IRS has experienced,” PMA Executive Director Kelly Reyes wrote in a letter to an IRS advisory committee. “Very few IRS employees are eager and interested in becoming IRS managers.”

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Bottom line: While the IRS reversal on civil rights office layoffs offers temporary relief for some employees, the agency still faces massive staffing gaps, tense labor negotiations, and urgent service-level concerns heading into the 2026 tax season.

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FAQ'S

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Is the IRS short-staffed in 2025?

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Yes, the IRS is significantly understaffed in 2025.

• Its workforce has declined by approximately 25%, from around 103,000 employees in January to about 77,400 as of May
  
  
• Additionally, workforce reductions via Deferred Resignation Programs (DRP/TDRP), voluntary retirements, and other separations account for over 25,000 exits
  
  
• The IT and support divisions may shrink further from ~10,371 staff to just 4,250, implying a 60% reduction in that segment alone
  
  

Will there be major layoffs in 2025?

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Major workforce reductions are underway, with more potentially coming:

• The IRS workforce cuts could reach 40% reductions bringing staffing below 60,000 employees by the fiscal year’s end
  
  
• Already, 22,000 workers have accepted deferred resignations, 7,000 probationary employees were terminated, and thousands more have taken voluntary separation incentives
  
  
• While many terminations have been paused due to court interventions, broader RIFs still loom
  
  

What is the IRS RIF update for 2025?

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The Reduction-in-Force (RIF) process evolved significantly throughout 2025:

• In March and April, 294 employees received RIF notices across key offices like Civil Rights, Taxpayer Experience, and IT
• Courts intervened, pausing terminations and reinstating 3,023 probationary employees who had been terminated 
• Despite receiving RIF notices, no one has been terminated due to ongoing injunctions 
• However, DRP and voluntary separation programs continue, with nearly 4,600 approved DRP participants on paid administrative leave through September 2025
  
  

How many federal layoffs are happening in 2025?

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Layoff data varies by agency, but federal-level numbers are staggering:

• Recent estimates show ~275,000 federal civil service layoffs announced by mid-2025 affecting roughly 12% of 2.4 million civilian federal workers
  
  
• As for the IRS specifically:
  
  
  • Around 22,000 deferred resignations, 7,000 probationary terminations, and other separations are on record
    
    
  • Additionally, 11,000 IRS employees had exited by March via DRP or termination programs, impacting revenue agents and contact representatives 

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