Article: Trump offers exit package for federal workers

Talent Management

Trump offers exit package for federal workers

Is a deferred resignation the most humane way to downsize a workforce, or a clever strategy to push employees out the door?
Trump offers exit package for federal workers
 

A unique exit package lets employees resign while staying on payroll – minimising layoffs, reducing disruption, and redefining workforce transitions.

 

Imagine being able to call it quits at work while staying on the payroll.

That’s the idea behind a new incentive to get public sector workers to quit without their bosses feeling guilty over initiating layoffs.

Once workers opt in, they can start looking for new opportunities and earn until their last day onboard.

It’s a lesson for HR decision-makers everywhere, a lesson designed by the government efficiency team of US President Donald Trump.

The strategy applies in the corporate world as much as it does in government.

US federal workers have the option to quit now but they will remain on the government payroll until 30 September, the Trump administration told workers.

The unique exit package is one of a multitude of initiatives the government is offering the workforce as it strives to reduce headcount.

More than 2 million full-time civilian employees may opt for the arrangement – dubbed the “deferred resignation programme” – which will enable departing employees to offload their tasks or have them reduced while waiting for their final work day in September, according to an email circulated among employees and confirmed by Reuters.

Workers interested in the exit package may reply to the official email with the word “Resign”. They have until 6 February to opt in.

The programme is open to civilian federal workers, except those assigned to roles in national security, immigration and the postal service.

The offer is one of a string of HR policy changes intended to maintain a “more streamlined and flexible workforce” across bureaucratic agencies, the Trump administration claims.

In his first week back at the White House, Trump and his HR team – the Office of Personnel Management – reportedly asked agency leaders to produce a list of employees who have been with the team for only 12 to 24 months, and to decide whether the employees in question would be retained or dismissed.

Meanwhile, Trump’s return-to-office policy requires all federal workers to start reporting for work on site for five days a week.

The move, according to Trump’s government efficiency adviser Elon Musk, is blatantly designed to drive a wedge between those who are willing to commit to an in-person setup and those who cannot afford to and would rather quit.

Given the new HR policies in place, the Trump administration said restructurings and layoffs will continue.

“At this time, we cannot give you full assurance regarding the certainty of your position or agency, but should your position be eliminated you will be treated with dignity,” the missive purportedly said.

The reform of the federal workforce will be significant.”

HR lessons on a graceful exit?

1. Voluntary exits reduce legal and ethical risks

Offering employees the option to resign while staying on payroll can help HR avoid the legal and reputational pitfalls of forced layoffs. This approach minimises wrongful termination claims, union disputes, and negative press, while allowing organisations to maintain goodwill with departing employees.

2. Minimising workforce disruptions

When employees know they will exit at a specific date but remain on payroll, they have time to offload tasks, train replacements, and document key processes. This structured transition prevents knowledge loss and operational chaos, ensuring business continuity.

HR professionals can use this approach to safeguard institutional knowledge while managing headcount reductions efficiently.

3. Enhancing employer brand and talent attraction

A company that handles downsizing with empathy and structure sends a positive message to both current employees and future hires. Organisations that demonstrate fairness in exit strategies maintain a strong employer brand, which is crucial in attracting top talent.

HR leaders who implement thoughtful exit strategies can position their companies as people-centric even in difficult times.

4. Encouraging honest career transitions

Many employees stay in roles longer than they should due to financial insecurity or fear of uncertainty. A structured exit package gives employees the freedom to explore better opportunities without the immediate pressure of losing income.

HR leaders can use this lesson to design exit incentives that help employees transition to careers where they are more engaged and productive, reducing presenteeism and disengagement.

5. Separating high-commitment employees from those ready to leave

In giving employees an easy exit option, organisations can identify who is fully committed to their mission and who might already be disengaged. This helps HR leaders focus resources on retaining and developing employees who are genuinely invested in the organisation’s future, rather than spending time managing those who are mentally checked out.

6. Providing a humane alternative to sudden layoffs

Layoffs often come as a shock, leaving employees unprepared and resentful. A voluntary exit program offers employees time to adjust, plan their next move, and leave on their own terms.

This approach helps preserve employee morale and prevents the workplace from becoming an environment of fear and uncertainty.

7. Aligning workforce planning with long-term organisational goals

A structured resignation program allows HR to proactively manage workforce reductions rather than reacting to budget cuts or crises.

Planning exits months in advance can help HR teams strategically reshape the workforce to align with long-term goals, ensuring that any reductions serve the organisation’s broader mission rather than being reactive cost-cutting measures.

Rather than treating layoffs as an unavoidable burden, HR can use structured exit programs to create a smoother, more dignified, and ultimately more effective transition for employees and organisations.

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Topics: Talent Management, #Layoffs

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