The Social Security Administration plans to reduce the size of its “bloated workforce and organizational structure” (according to an official SSA Feb. 28 press release) to the tune of laying off roughly 7,000 people currently working for the agency.
“Social Security recently set a staffing target of 50,000, down from the current level of approximately 57,000 employees. Rumor of a 50% reduction is false.”
Feb. 28 SSA press release
“Social Security recently set a staffing target of 50,000, down from the current level of approximately 57,000 employees. Rumor of a 50% reduction is false,” the release said.
The announcement triggered alarm bells from a number of Democrats and Social Security advocates who say President Donald Trump and DOGE leader Elon Musk’s plans to “gut” the SSA will make it harder for Americans who’ve paid into Social Security their whole lives to get the benefits they have earned (more on opposition below).
Initial steps to reduce the SSA workforce included offering a limited number of employees the opportunity to leave the agency under the Deferred Resignation Program and Voluntary Early Retirement (VERA).
On Feb. 27, the agency announced to all employees that Social Security would soon implement “agency-wide organizational restructuring” that will include significant workforce reductions. The announcement includes offering Voluntary Separation Incentive Payments (VSIP) to all employees on a first-come, first-serve basis and expanding VERA to all employees. Both VERA and VSIP require employees to opt in and to separate from the agency by specific dates.
Social Security anticipates that much of the staff reductions needed to reach the target of 50,000 will come from retirement, VSIP, and resignation. Additional reductions will come from reduction-in-force (RIF) actions that could include abolishment of organizations and positions. RIF also can include directed reassignments from one position to another position in the agency. Agencies are required to submit their RIF plans to the Office of Personnel Management (OPM) by March 13, 2025. No date has been set when a RIF might begin after OPM approves the plan.
On Monday, SSA issued a press release saying it continues “to make good on President Trump’s promise” to protect American taxpayers from unnecessary spending while continuing to ensure it delivers on its mission.
“For too long, SSA has operated on autopilot,” said Lee Dudek, Acting Commissioner of Social Security. “We have spent billions annually doing the same things the same way, leading to bureaucratic stagnation, inefficiency, and a lack of meaningful service improvements. It is time to change just that.”
The release went on to say the agency has thus far identified over $800 million in cost savings or cost avoidance for fiscal year (FY) 2025 in areas of payroll, information technology, contracts and grants, and space savings (i.e., real property), and other savings through new, common-sense approaches to printing, travel, and purchase card policies.
Much of that $800 million comes from payroll in the form of freezing SSA and Disability Determination Services (DDS) hiring and drastically reduced overtime—which the release says will save $550 million.
Dudek, a relatively unknown mid-level official in the agency, was elevated to the acting commissioner position just a couple of weeks ago after the firing of acting commissioner Michelle King, who resigned after resisting giving DOGE teams access to agency data. Dudek, who had previously been placed on administrative leave for assisting DOGE representatives, is serving temporarily while Frank Bisignano, former CEO of payment processor Fiserv, awaits confirmation to lead SSA.
Last week, Dudek announced the closures of two small internal offices as work continued to pursue efficiencies within the agency and align like missions. The offices closed last week included the Office of Transformation and the Office of Civil Rights and Equal Opportunity, impacting roughly 190 workers who were put on administrative leave. Dudek said in a Feb. 25 press release that these offices were “duplicative” and “wasteful,” and said that their duties would be handled elsewhere at SSA.
O’Malley warns of collapse
The SSA has long maintained it is already struggling with staffing shortages and customer service backlogs. In testimony before Congress in March of 2024, former SSA Commissioner Martin O’Malley said that by the end of FY 2024, the agency would serve 7 million more beneficiaries with 7,000 fewer full-time staff than in FY 2015. He warned that the SSA cannot “keep doing more with less,” adding that budget constraints have left the agency at its lowest staffing level in 25 years.
O’Malley recently told The Washington Post that mass layoffs and office closures would worsen delays and limit critical services for beneficiaries. “At this rate, they [DOGE] will break it. And they will break it fast, and there will be an interruption of benefits,” O’Malley said.
He doubled down on that in comments to CNBC over the weekend, saying the recent cuts initiated by Elon Musk’s Department of Government Efficiency (DOGE) at the SSA could result in dire consequences for the bedrock program that has never missed a benefit payment since it first began more than eight decades ago.
“Ultimately, you’re going to see the system collapse and an interruption of benefits,” O’Malley told CNBC. “I believe you will see that within the next 30 to 90 days.”
Dem Senators blast cuts
O’Malley is not alone in voicing concern.
In a press conference Monday, U.S. Senator Patty Murray (D-WA), Vice Chair of the Senate Appropriations, joined Senate Democratic Leader Chuck Schumer (D-NY), Senator Ron Wyden (D-OR), Ranking Member of the Finance Committee, and Senator Amy Klobuchar (D-MN) in blasting President Trump and Elon Musk’s plans to gut the Social Security Administration (SSA).
“We’re here today because Donald Trump and Elon Musk are taking a wrecking ball to the Social Security Administration and putting your Social Security benefits at risk,” Murray said, noting that over the weekend, Musk had referred to Social Security as “the biggest Ponzi scheme of all time” while on the Joe Rogan Experience podcast.
“The richest man in the world is telling Americans that earned benefits that they depend on and that they paid into are a scam. They are not a scam, and Americans know it,” Schumer said during Monday’s press conference.
“I can promise this to the American people: Senate Democrats—every single one of us—will fight this effort to decimate Social Security benefits and fight for Americans to get the money they deserve and they earned,” Schumer added. “But we need your help. We need every person who is a recipient or would-be recipient who would like to get this benefit to call their Republican congressman and senators and give them one simple sentence: ‘Hands off my Social Security.’”
During his remarks, Wyden said he views DOGE’s efforts at the agency as a first step on the path to privatizing Social Security.” He added that the agency is already at a 50-year staffing low. That, combined with plans to close more than half of the regional field offices, means “there is no conceivable way that Social Security benefits will be paid on time and in full to Americans who have earned them by paying into the program with every paycheck.”
In 2023, SSA field offices had nearly 120,000 Americans visit per day.
Social Security Works, an organization aiming to protect and expand Social Security, Medicare and Medicaid, issued a press release Monday titled, “Elon Musk is Dismantling Social Security,” featuring a statement from President Nancy Altman.
“Musk and Trump want to undermine support for our Social Security system by convincing the American people that this extremely efficiently run program is rife with fraud, waste, and abuse.”
Nancy Altman, Social Security Works
“Musk and Trump want to undermine support for our Social Security system by convincing the American people that this extremely efficiently run program is rife with fraud, waste, and abuse,” Altman said.
“Trump and Musk have announced their intention to close every Social Security field office, so that no one can claim their earned benefits in person. That will increase fraud, since historically it has been caught by those who meet with the public face to face. It will also make it impossible for many Americans to get the support they need to access their benefits,” Altman said. “These layoffs are so destabilizing that it is even possible that Americans may see a disruption in their monthly payments.”
On NBC’s “Meet the Press” Sunday, House Speaker Mike Johnson (R-LA), speaking to Musk’s weekend comments about Social Security being a Ponzi scheme, argued any Musk-led efforts to scrutinize Social Security will focus on “fraud, waste and abuse.”
In August 2024, Social Security’s independent Office of the Inspector General found that between fiscal 2015 and 2022, less than 1% of its payments were “improper.”
“The point really is if you take the system today with these superb type of statistics,” Wyden said Monday, “and then you start hollowing it out, which is essentially what they’re doing. You hollow it out and then you say, ‘oh my goodness, we need the private sector here or we won’t have a program.’”
SEE ALSO:
• Top Social Security Official Resigns in Wake of Clash with Musk’s DOGE
• Trump Nominates Fiserv CEO Frank Bisignano to Head Social Security
• Report Estimates $1.1 Billion in Improper Social Security Payments
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
