Argentina steps up drive to shrink public-sector workforce

President Javier Milei's government has initiated a voluntary redundancy program to eliminate an additional 20,000 public-sector jobs, bringing the total cuts under his administration to over 77,000 positions. The one-month scheme, set to commence on November 1, aims to efficiently allocate public resources and reduce spending, allowing for further tax cuts, according to Deregulation & State Transformation Minister Federico Sturzenegger.

The program offers varied payment packages and benefits based on employees' age and tenure, with a stipulation that they cannot rejoin public administration for eight years. The ATE state-workers' association has denounced the scheme as coercive dismissal, rejecting the decree. Since Milei's December 2023 inauguration, Argentina's public-sector workforce has experienced significant reductions, with 21 percent of jobs cut, amounting to 77,500 fewer positions.

Overall, Argentina has lost 241,000 private-sector jobs and now has 482,000 private-sector employers, the fewest since 2007, according to Fundar. Sturzenegger's latest figures indicate 400,000 jobs have been created, including informal employment and self-employed workers, though informal employment has risen by three percentage points in the past three years, reaching approximately 45 percent.