Northern Virginia leaders warn federal layoffs threaten local economy
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Illustration: Annelise Capossela/Axios
Some Virginia leaders are ringing the alarm over the effect the Trump administration's federal cuts are having on its local workforce and economy — especially in Northern Virginia.
Why it matters: Virginia's unemployment rate has risen for six consecutive months — hitting 3.5% in June.
The big picture: Virginia was the only state in the nation that saw a "statistically significant" increase in unemployment last month, according to the latest U.S. Bureau of Labor Statistics data.
- Virginia also recently dropped to No. 4 on CNBC's yearly Top State for Business rankings — a hit for a state that's come in at No. 1 a record six times. The impact of federal job cuts on the economy was cited as the driving factor.
Zoom in: NoVa, which historically has been home to a large concentration of federal jobs, saw the biggest employment decline out of Virginia's metro areas from May to June, per a new Virginia Works report.
- The metro saw a loss of 4,700 jobs in that period.
- Fairfax County has seen the number of its unemployed residents jump 34.7% in the last year, reports the Richmond Times-Dispatch.
Meanwhile, 80% of Northern Virginia business leaders are concerned about the impact DOGE's cuts are having on the regional economy, per a recent Northern Virginia Chamber of Commerce survey.
- Federal layoffs (47%) and inflation (47%) were the top two factors affecting regional business growth, per surveyed leaders.
- Yes, but: Overall, NoVa business leaders are feeling more optimistic about the local economy than they were this spring, found the survey.
Zoom out: An estimated 11,100 federal jobs have been cut in Virginia this year, per a recent report from the University of Virginia's Weldon Cooper Center for Public Service.
- 10,500 more positions could be threatened in the near future.
- Virginia employees at the Defense, Agriculture and Treasury departments have already seen some of the biggest cuts, and it's projected Virginia could see more employee reductions at the Defense and Veteran Affairs departments, per the report.
And contracting jobs are being impacted, too: Mitre Corp. and Goldschmitt & Associates — both based in Northern Virginia — have reported some of the highest numbers of contracting layoffs in the state, per the report.
What they're saying: Virginia Dems are putting the spotlight on the issue ahead of an election year that will determine which side of the aisle controls the state's government.
- "The Trump administration's approach is not working for Virginia," Democratic gubernatorial candidate Abigail Spanberger wrote last week in a Fox News op-ed criticizing Gov. Glenn Youngkin's response to Virginia job losses.
- And Fairfax County Board Chair Jeff McKay and state Senate Majority Leader Scott Surovell (D-Fairfax) released a statement last week criticizing President Trump's, Youngkin's and state Republicans' policies for threatening "the decades of leadership that has made Fairfax County the economic engine of Virginia."
The other side: Though Youngkin recently announced in a statement that Virginia's nonfarm employment decreased by 8,400 jobs in June due to federal cuts, he pointed out that, overall, jobs are up by 35,600 since June 2024.
- "Virginia's financial and economic strength continue to provide the fuel for new opportunities and growth," Youngkin said in the statement.
What we're watching: The number of Virginia's laid-off feds will likely continue to increase this fall, as those who opted for deferred resignations or buyouts come off the government payroll.