Argentina steps up drive to shrink public-sector workforce

President Javier Milei’s government has launched a voluntary redundancy scheme aimed at eliminating a further 20,000 public-sector jobs, adding to the more than 77,000 posts already cut during his administration.

The scheme, established by Decree 1203/2026, published in the Official Gazette on Monday, offers financial compensation of up to the equivalent of 25 gross monthly salaries.

Posts held by workers who accept the offer will be permanently eliminated from the state budget.

The scheme is open to permanent staff and employees on indefinite-term contracts within the centralised national administration, but excludes temporary workers and staff at decentralised agencies, including the ANSES social security agency, which has its own scheme.

Compensation will depend on employees’ age, length of service and pension status, with different arrangements for those approaching retirement. 

Workers who qualify for the scheme will be barred from returning to national public-sector employment for eight years, including through management positions, advisory roles and contracts, although university teaching is exempt.

“We continue to look for ways to reduce public spending so we can keep cutting taxes,” said Deregulation & State Transformation Minister Federico Sturzenegger in a post on X.

The ATE state-workers’ association has announced a demonstration to protest against the scheme.

“This is not voluntary redundancy, it is coercive dismissal. We totally reject this decree,” the union’s general secretary, Rodolfo Aguiar, wrote on X.

Argentina’s public-sector workforce has been among the areas hardest hit by Milei’s policy of public spending cuts, which he has branded the “chainsaw.”

According to figures released by Sturzenegger back in September, 21 percent of jobs in the national public administration have been cut since Milei took office in December 2023, equivalent to 77,500 fewer positions.

Argentina has lost as many as 241,000 private-sector payroll jobs since Milei took office, official figures show. The number of private-sector employers has fallen to 482,000 companies, the lowest level since 2007, according to think tank Fundar.

In his post, Sturzenegger pointed to the creation of around 400,000 jobs, although his figures include informal employment and self-employed workers.

Informal employment in Argentina has risen by three percentage points over the last three years, reaching around 45 percent.

– TIMES/AFP/NA