August 1, 1996
THE DAILY FED
IRS to Lay Off 5,000 Workers
The IRS plans to lay off about 5000 employees, with nearly half of them from the ranks of Washington headquarters personnel. The layoffs in the Washington area will target workers involved with the IRS's computer modernization project, whose management has been attacked in Congress. The systems modernization project is expected to suffer a major budget cut this coming year. The IRS budget was cut by 2 percent last year and the agency anticipates another reduction--of at least 6 percent--for fiscal l997.
About half the cuts will take place by the end of January, with the rest scheduled to occur by late March. In addition, as many as 15,000 workers could find themselves demoted or reassigned, reports The Washington Post in its Aug. 1 editions.
Field employees laid off will mostly be clerical and administrative workers. The 10 service centers that handle returns are not expected not to suffer job losses. Instead, layoffs will come from the toll-free telephone system and offices that served as district headquarters prior to a recent reorganization.
The IRS has a total of 106,350 employees at present. The agency's layoffs would be the largest in recent times. Though the government's civilian work force has shrunk by about 200,000 people since President Clinton took office, most of the shrinkage has come through buyouts, hiring freezes and early retirements. Last year, the entire federal government laid off only 7,352 people.
Watch for a feature story on the reasons for the IRS's problems with its tax systems modernization project -- upcoming in the September issue of Government Executive.The electronic version of this feature will be posted on this web site during the second half of August.