The Internal Revenue Service is abruptly reversing its layoff plans. The agency is now scrambling to fill critical staffing holes. This move follows the departure of 26,000 employees since January. The IRS will now use hiring and reassignments to rebuild its workforce.
A Major Reversal on Workforce Cuts
The decision marks a significant pivot for the tax agency. The IRS had planned to reduce its workforce to below 60,000 employees. It used buyouts and incentives to push 26,000 workers out. Now, the agency is canceling planned layoffs. It is also asking some employees who accepted buyouts to return. The Treasury Department stated it is committed to staffing the agency appropriately.
Mission-Critical Gaps Prompt the Change
Recent staff reductions created serious operational risks. An internal IRS memo cited a “potential gap in mission critical expertise.” Leaders realized the cuts threatened the agency’s ability to function. The National Taxpayer Advocate previously warned that the cuts could jeopardize the 2026 tax filing season. Staffing shortages in IT have also imperiled the agency’s modernization plans.
How the IRS is Plugging the Holes
The agency is using several tools to restaff. It has already canceled layoff notices for about 50 employees in its Taxpayer Experience Office. It is also reassigning current staff to new roles. Some IT workers now report to the chief operating officer. Management staff are being moved “into the field” as revenue agents. The IRS has also started posting new job openings on USAJOBS.
Turmoil Amid a Government-Wide Push
This reversal happens during a broader push to shrink the federal government. The administration has cut around 150,000 federal jobs since January. However, other agencies like the Labor and HHS departments have also rescinded layoffs. The changes at the IRS come during a period of leadership instability. The agency is on its sixth acting leader since January 2025.
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