Federal job losses tied to the Department of Government Efficiency wiped out all of Virginia’s federal job gains of six years in just 11 months last year, according to Bureau of Labor Statistics data.
In most years since 2005, Virginia has had a net gain of federal jobs. But in 2025, the Commonwealth saw federal job losses accelerate sharply, resulting in a net decline of 23,500 civilian federal jobs through November, according to an analysis of BLS data by the Virginia Center for Investigative Journalism at WHRO.
In addition, company layoffs reported to the state totalled nearly 7,000 workers last year, an increase of about 70% from the previous year.
Overall civilian employment in Virginia in November was 4.268 million, according to the BLS. At the end of 2024, overall civilian employment stood at 4.273 million. The figures do not include military personnel or farm workers.
The BLS data is the first comprehensive insight into the extent of DOGE cuts made last year. Experts say the massive federal job cuts have serious implications for a state that is home to one of the largest populations of federal workers in the country.
“On average, each federal government employee earns about 1.6 times the average private sector employee,” said Bob McNab, who chairs the department of economics at Old Dominion University. “If we include benefits, that ratio climbs to two. So, Virginia losing 23,500 federal government jobs last year is roughly the equivalent of losing 47,000 private sector jobs.”
Data reported last year shows there were fewer Virginians at work or looking for work, he said. Fewer workers translates to fewer tax revenues, especially to cities and counties in Northern Virginia. The region accounts for about half of the economic activity in the state.
There isn’t an easy turnaround, McNab said. Virginia would need to add 2,000 new jobs every month to catch up.
“The problem is that it only replaces the wages and benefits when those people were hired,” he said. “The deficit between when they were fired and replaced is still there.”
The job losses contributed to Virginia losing its spot as the No. 1 state for business in the country.
Eric Scorsone, executive director of the University of Virginia’s Weldon Cooper Center for Public Service, told VCIJ the shock caused by the layoffs may cause problems for the economy in the long term. But he sees hope in the way of increased military spending in Virginia.
“The offsetting factor might be military spending, but it's hard to say if that's going to be a reality or not,” he said. “Virginia has really relied on the federal government. It has been a good deal, quite frankly. But that's kind of going away.”
Scorsone told CNBC last year that the effect of the massive layoffs might affect sectors like leisure, lodging, and retail as people lose their jobs and spend less.
McNab agreed with the likelihood of more direct defense spending in Virginia, but said the increases would likely be insufficient to offset “the continuing impact of the loss of federal government employees, and the cancellation of federal government grants and contracts to universities and other institutions across the Commonwealth.”
Beyond federal government job cuts, Worker Adjustment and Retaining Notification reports help give a more complete picture of job losses last year in Virginia.
The WARN notices showed Virginia companies shed nearly 7,000 jobs in 2025, an increase of nearly 70 percent from 2024. The 2025 layoffs surpassed the total of layoffs between 2021 and 2024. The COVID-19 pandemic in 2020 caused more than 30,000 job losses.
The notices often do not capture all layoffs. Companies with more than 100 employees must give 60 days' notice for large layoffs, affecting at least 50 employees or one-third of the workforce.
Nearly a quarter of all layoffs in Virginia last year came from companies in the manufacturing industry. It follows a trend of decline in manufacturing across the United States, which has been going on for many years, Scorsone said.
“Last year was a tough year because of tariffs and disruptions in trade,” he said. “But, keeping in mind that manufacturing employment has been going down in this country for a long time.”
Virginia has 240,000 manufacturing jobs today, down from nearly 390,000 in 1990, according to Bureau of Labor Statistics data.
Goodyear accounted for the largest single round of layoffs in Virginia in 2025, cutting 815 jobs at its Danville plant as part of a global restructuring. The company is shifting the facility from commercial tires toward aviation tire production and mixing, according to a WARN notice and company statements. The job losses were the latest blow to Danville, a small Southside city with 42,000 residents.
The community has spent decades trying to rebuild after the collapse of its tobacco and textile economy and the decline of major employers such as the Dan River Mills. The upheaval has reshaped the city’s tax base and workforce. In recent years, Danville has pinned much of its comeback narrative on redevelopment in the River District and big-ticket bets like the Caesars Virginia casino project and the Southern Virginia Megasite.
In Emporia, Georgia Pacific, one of the world's largest manufacturers of paper products, shut the doors of its plywood mill, cutting 550 workers in the process.
Aside from manufacturing, the healthcare sector also took a big hit with companies like Molina Healthcare, Compass One and Sentara Health laying off hundreds of workers. When Molina closed its Henrico office in June 2025, 268 workers lost their jobs.
Company layoffs affected some parts of Virginia more than others. Northern Virginia took the biggest hit, with companies located in the area accounting for more than a third of all job losses reported in WARN notices last year.
Northern Virginia was disproportionately affected by federal government job cuts. About 350,000 civilian federal employees live in Virginia, more than half of them in Northern Virginia, according to the U.S. Census Bureau.
Last year, 80% of business leaders surveyed in Northern Virginia warned that DOGE cuts could hurt the region’s economy.
Reach Kunle Falayi at kunle.falayi@vcij.org.
