Mass resignations, layoffs and turmoil within the federal workforce present sweeping and potentially unprecedented challenges for Arlington’s economy, experts say.
As President Donald Trump’s plans to dramatically shrink the federal government have begun to take shape in recent weeks, so have projections for wide-ranging economic fallout throughout the D.C. area.
Efforts to eliminate federal jobs are expected to impact numerous agencies with ties to Arlington, including the Department of Defense. But even if the Pentagon sidesteps the most severe cuts, this won’t be enough to insulate Arlington County from broader, region-wide impacts, local civic and business leaders agree.
Despite years of attempts to reduce the county’s reliance on federal spending, Arlington’s extensive ties across the Potomac leave it economically vulnerable to ongoing shakeups.
“Just the sheer magnitude of what we’re talking about is going to negatively impact all of our jurisdictions in the region,” said Terry Clower, director for the Center for Regional Analysis at George Mason University’s Schar School of Policy and Government. “There’s nobody immune to it.”
Arlington leaders disagree over how changes will ultimately shape the county, with its approximately 23,800 civilian federal workers. They agree, however, that adapting to fundamental shifts in the region’s landscape will require concerted efforts at every level.
“Arlingtonians need to close ranks,” Arlington County Board Chair Takis Karantonis told ARLnow. “They have to care a lot more about each other. They have to rank their priorities accordingly.”
‘People are panicked’
Across the D.C. area, people whose jobs depend on the federal government have described scenes of tremendous stress in recent weeks.
“People are panicked. People are crying. People are trying to look for other jobs, but very cognizant of the fact that everybody is looking for jobs,” a federal research contractor who lives in Cherrydale told ARLnow. “It feels like the whole industry is being destroyed.”
A wide range of federal agencies have a presence in Arlington. Beyond the DoD, they include the Department of Homeland Security, the Department of Justice, the Department of State, the Department of Health and Human Services, the Federal Deposit Insurance Corporation and the General Services Administration.
In total, about 10.7% of Arlington’s 221,400 workers are civilians employed by the federal government, according to data from Arlington Economic Development (AED).
This number doesn’t include federal contractors or federal workers who reside in the county but work elsewhere.
A significant portion of Arlington’s economy is built around these workers eating in local restaurants, shopping at local retailers and otherwise patronizing the county’s businesses, experts told ARLnow. Uncertainty tends to jeopardize this kind of spending.
“Even people who are in the federal service now are probably sitting back and thinking, ‘Hm, do I really need to go out to dinner on Valentine’s, or do we maybe just order out, eat in and basically not spend as much money?'” said Clower.
Clower estimates that every federal job creates around 0.4 other jobs in the local economy — but that’s not factoring in contractors. Including contracting companies like Leidos, Deloitte and Lockheed Martin, he calculates that every federal job lost in Arlington translates to a total loss of between two and three local jobs.
“We just don’t know where and what magnitude,” he said. “Maybe it’s the short end of that. Maybe it’s the longer end. It just depends on what else happens.”
Over the years, the federal government has periodically taken steps to reduce its presence in Arlington. This happened after the Budget Control Act of 2011 and the DoD’s Base Realignment and Closure (BRAC) process in 2005.
But as 75,000 federal workers have reportedly accepted “deferred resignation” offers and the Trump administration has begun slashing probationary employees — with talk of even bigger cuts to come — Clower said past changes pale in comparison to steps taken in recent weeks.
The professor is still waiting to see the locations of the job cuts, and also whether Trump makes good on campaign promises to relocate huge numbers of jobs out of the D.C. area. No matter what, he said Arlington, and the D.C. area as a whole, has no recent precedent for this kind of precariousness at the federal level.
“At least in modern history, there is no time we can point to where there has been a proposed disruption in the federal sector of anywhere near this magnitude,” Clower said.
‘Like the beginning of the pandemic’
The most severe impacts, experts say, come when workers lose their jobs, vacate Arlington office space and, potentially, leave the D.C. area.
AED Director Ryan Touhill, who sees Arlington’s workforce as “the number one competitive edge we have,” is especially concerned about this last possibility.
“The folks that work in the federal government are incredibly valued. They’re highly educated; they’re dedicated; they are highly skilled. In some cases, they’re subject matter experts,” he said. “We do not want those folks, if they suddenly are transitioned out of government, to leave this community.”
So far, AED has hosted two workshops for federal employees facing career shifts. Touhill hopes to keep these up, while continuing efforts to attract both major tech companies and smaller startups.
AED has long maintained a focus on diversifying Arlington’s economy. Its current strategic plan, released last May, acknowledges the county’s proximity to D.C. as one of its main assets — but it warns against over-reliance on any single industry or employer.
“External forces such as automation, AI and further reductions in the federal workforce all indicate that we need to remain steadfast in building a diverse and resilient economy where all members of our community can thrive,” the plan cautions.
But Clower says this is easier said than done. Despite successes in attracting Amazon’s HQ2 and clinching the corporate headquarters of CoStar Group last year, the county has struggled to expand its commercial tax base in recent years.
He argued that softening the blow of federal spending cuts will require a much more aggressive approach to securing private-sector employers not dependent on the federal government — a significant change for county leaders, in his view.
“They just do not have the multi-decade, almost multi-generational experience, from a leadership perspective, of fighting for attracting new businesses to come to the region,” Clower said. “It’s going to require a lot of effort, and it’s not the kind of thing that turns quickly.”
For the time being, Touhill said his team is watching the headlines to see which of the threatened moves to shrink the federal workforce actually come to pass. At the moment, he said it’s too soon to predict what the final outcome will be.
“One of my team members said yesterday that this feels a lot like the beginning of the pandemic, where we were in this very new environment,” Touhill said. “Things were changing every day, and as a result, that created a lot of, you know, not just uncertainty, but concern in the community — but eventually, it kind of evened out.”
In coming weeks and months, Touhill hopes to start “at least having some sense of where this is going, so we can begin to respond.”
“That’s, I think, the best we can hope for right now,” he said.
Leaders debate the path forward
How Arlington’s leaders should approach such significant changes is a matter of some debate.
Karantonis defended ongoing attempts to make Arlington more economically diverse and resilient. The problem, he said, is not the county’s strategy but Trump’s.
“The political scenery across the river is a threat — there is no doubt about that. It’s a multifaceted threat,” he said. “It represents a huge change for us, but not a change that is welcomed. … It is a change that is imposed on us without our consent.”
Around 19% of Arlington voters cast ballots for Trump in November, up slightly from about 17% in both 2020 and 2016.
Matthew Hurtt, chair of the Arlington GOP, has defended workforce reductions despite the immediate impacts they’re likely to have. In a statement to ARLnow, he cast recent changes as an opportunity to shift away from what he sees as excessive reliance on the White House.
“Arlington and Northern Virginia’s dependence on an ever-expanding federal workforce is short-sighted,” he told ARLnow. “In their quest to resist President Trump’s mandate, county and regional leaders refuse to see what is possible when the taxpayer-funded sector is reduced and innovators and entrepreneurs are allowed to create opportunities.”
Neither Touhill nor the Arlington Chamber of Commerce has laid out plans for any overall changes in strategy in response to federal cuts.
However, Touhill called federal jobs “vital to our county, our state and our nation” and said that major reductions “would be very challenging for our county to handle.” Within AED’s scope, he underscored efforts to attract new businesses and connect federal employees to existing jobs.
“I can’t control what’s happening with the federal government, and so falling back on what we know and what we have the ability to do, I think is a good position for us to be in right now,” he said.
Despite the upheaval, around 242,000 active job openings currently exist in the D.C. area, according to David Remick, executive director of the Alexandria/Arlington Regional Workforce Council.
Kate Bates, president and CEO of the Arlington Chamber of Commerce, said that the Chamber “continues to closely monitor changes to the federal workforce and their potential impact on Arlington’s economy.”
“We remain engaged with key stakeholders, including Arlington Economic Development, to assess potential effects and ensure that Arlington remains a strong environment for business and economic growth that supports businesses and residents alike,” she said. “We will continue to evaluate developments and advocate for policies that support our local economy.”
Clower acknowledged the difficulty of finding ways to reposition an economy so heavily dependent on federal dollars.
If Arlington can’t find ways to adapt quickly, however, he warned that current changes may hinder the county’s outlook for years to come.
“The federal government is still going to be big here,” he said. “It’s still going to be important, but … it could realistically be a decade, multiple decades [of a slower local economy] if we don’t do a shift and get out ahead of this problem as much as possible.”
