OpenFeds Analysis
Did DOGE Workforce Cuts Actually Save Money?
DOGE claims $110 billion in savings. The transition costs exceeded $6.8 billion. Verified recurring savings are around $5.5 billion. Year 1 was almost certainly a net loss. Here's the full accounting.
🔴The Costs: $6.8 Billion in Transition Expenses
Restructuring 280,000+ positions isn't free. Here's what the government spent or committed:
76,000 employees × ~8 months of salary and benefits on admin leave
Jan 2025 – Jan 2026, per Partnership for Public Service
Agencies rehiring for critical roles at market rates (NPR, Oct 2025)
Union challenges, MSPB appeals, court-ordered reinstatements
What's not counted
- • Productivity loss during 6+ months of organizational chaos
- • Institutional knowledge that walked out the door permanently
- • State unemployment insurance costs from 280K+ newly-jobless workers
- • Contract termination penalties and early lease break fees
- • Impact on remaining workforce morale and productivity
🟢The Savings: What's Actually Verified?
DOGE's headline: $110.3 billion in savings. Reality is… more complicated.
Ceiling values of terminated contracts, grants, and leases
Actual savings verified against FPDS records — 0.1% of federal budget
280K positions × ~$89K avg salary × 0.22 (net of replacements/rehires)
The gap: DOGE claims $110.3B. Independent analysis confirms $8.6B in contract savings and roughly $5.5B in annual workforce salary reductions. The remaining ~$96B represents contract ceiling values that were never going to be spent in full.
📐The Math: Year 1 vs. Year 2+
Here's the simple question: did the restructuring pay for itself?
Year 1 (FY2025–26)
* Looks positive — but contract “savings” are mostly one-time ceiling reductions, not recurring. True recurring net = $5.5B − $6.81B = −$1.31B
Year 2+ (FY2027+)
* Assumes no further rehiring waves and positions stay eliminated
🔑 Key Takeaway
On a recurring basis, the workforce restructuring likely saves $4–5 billion per year — meaningful but a fraction of the $110B claimed. The transition costs mean it took roughly 18 months to break even. Whether these savings persist depends entirely on whether agencies resist the temptation to backfill.
⚠️The Risk: Backfill Creep
History suggests government downsizing rarely sticks. After every major reduction — Clinton-era reinvention, sequestration, hiring freezes — the workforce eventually regrows. NPR reported in October 2025 that agencies were already rehiring and spending more.
🏛️The Bottom Line
Did DOGE save $110 billion? No. That number is mostly fiction — contract ceiling values that wouldn't have been spent regardless.
Did the workforce cuts save anything? Yes — roughly $4–5 billion per year in recurring salary costs, assuming positions stay eliminated.
Was it done efficiently? No. The DRP alone cost $4.5 billion for zero productivity. A phased approach using attrition, targeted RIFs, and hiring freezes would have achieved similar headcount reductions at a fraction of the cost.
Was it worth it? That depends on whether you value speed over cost. The government shed 9% of its workforce in one year — but paid a steep premium for the privilege.