Shrinking VA workforce leads to layoff of 7,500 employees working with veterans
The Department of Veterans Affairs (VA) is facing ongoing staffing shortages in mission-critical and veteran-facing positions, as highlighted by the VA Office of Inspector General (OIG) in a June 2025 audit. The report emphasised weak controls and lack of oversight over incentive payment use, increasing risks to veteran healthcare delivery.
Over the past few years, VA incentive payments have surged dramatically, with increases of 85% for relocation, 131% for retention, and 237% for recruitment incentives observed. However, about $341 million out of $1.2 billion paid was not properly documented, revealing governance weaknesses that could compromise recruitment quality and retention stability.
Staffing reductions are also a critical factor. The VA has dismissed over 1,000 probationary employees, including clinical staff in oncology and mental health. Broader staffing cuts were planned, with nearly 30,000 jobs forecasted to be lost through attrition, retirements, and deferred resignations.
The VA is now reducing its use of pay incentives for recruiting and retaining employees in veteran-facing health care jobs. VA Chief Human Capital Officer Tracey Therit stated that these incentives help the VA make more competitive job offers to candidates in certain specialty areas, as pay caps for health care professionals at VA have not kept pace with rising salaries in the private sector.
Despite the scaling back of incentives, the VA is still struggling to attract and retain healthcare workers. The department is experiencing a 45% decrease in job applications submitted between fiscal 2025 and 2024, and a 56% reduction in new employees starting jobs.
However, Therit asserts that the department can fill most vacant direct-care positions without using these incentives. The VA is no longer considering a "department-wide" reduction-in-force to cut more than 80,000 positions. Instead, the VA is on track to shed nearly 30,000 employees through attrition by the end of the fiscal year, with most positions being administrative roles that will not be filled once employees leave.
More than 350,000 VA positions are exempt from a government-wide hiring freeze that President Donald Trump recently extended to Oct. 15. The VA is hiring several thousand VA employees each two-week pay period.
The VA Inspector General's office found that the department improperly awarded $10.8 million in critical skills incentives to more than 180 executives in September 2023. More than 90% of the improperly awarded bonuses have been recouped by the VA.
Rep. Delia Ramirez (D-Ill.) has expressed concern that the staffing changes at the VA could impact veteran-facing services. The North Battlefield Outpatient Clinic, which opened in April with about 27% of its staffing goal, is struggling to compete with the private sector for health care candidates. A VA psychologist at the clinic left after receiving a better offer in the private sector, with no relocation bonus offered.
These staffing challenges are particularly concerning for the VA, which serves the country's veterans. The VA clinic in Hampton, Virginia, for example, is still losing mission-critical employees, according to Sheila Elliot, a pharmacist at the facility. The clinic is scheduled to be fully operational with radiology, optometry, telehealth, and other services by January 2026, but the staffing shortages could potentially impact the quality and reliability of services provided to veterans.
The Department of Veterans Affairs (VA) is embracing a workforce reimagined, acknowledging the need for technology integration to increase staffing levels in the federal workforce, especially in veteran-facing health care positions. Despite the reduction in pay incentives and the ongoing staffing shortages, the VA aims to fill most vacant direct-care positions without relying on these incentives, focusing on administrative positions that will not be filled once employees leave. On the other hand, the misuse of critical skills incentives, as witnessed in September 2023, has emphasized the importance of strengthening governance to ensure the quality and stability of the VA workforce.
