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 new scheme will run for one month from November 1 and seeks to ensure “an appropriate and efficient allocation of public resources,” according to a decree published in the Official Gazette.

“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 new programme offers different payment packages and amounts depending on employees’ age and length of service. It also includes a clause prohibiting participants from returning to public administration for the following eight years.

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.