Argentine President Javier Milei has announced his plan to cut 70,000 government jobs in a bid to reduce public spending and reduce the national deficit to zero. The cuts are part of his broader strategy to achieve fiscal balance at any cost.
Milei announced the cuts during his closing speech at the International Economic Forum of the Americas in Buenos Aires this week.
Above 50,000 of Argentina approximately 3.5 million public sector workers have already been laid off, but more cuts are on the way. According to a declaration from the presidential office, the remaining 70,000 new layoffs will occur in phases, with at least 20% (14,000 jobs) expected to be cut by the end of March. The rest of the timeline will be announced in April.
The move sparked a significant reaction, particularly from Argentina’s powerful unions. The Association of State Workers (ATE), one of the unions representing public employees, claimed that at least 10,000 state employees have already been fired since Thursday. ATE leader Rodolfo Aguiar called “illegal” and “unjustified” dismissals and requested a national strike on April 3.
In addition to cutting jobs, Milei announced plans to stop public works, “something I’m deeply proud of, because public works is a great source of corruption, of theft, which I imagine all good people they should oppose it.” She also said that she was funding cut by provincial governments and the elimination of over 200,000 “irregular” social assistance plans.
Milei described his approach as a combination of “chainsaw” and “blender,” both of which he argues are necessary for rapid transformation of the economy. Argentina’s inflation rate has reached its highest level in three decades, exceeding 250%, with around 57% of the country’s population living in poverty. To end the economic crisis, Milei cut state subsidies, reduced the number of ministries by half, closed state agencies and devalued the peso by 50%.
President anticipates a V-shaped recovery for the economy, with short-term difficulties before things improve. “There’s a lot of talk that this isn’t sustainable. We did what we had to do and that requires doses of courage that others don’t have,” she said.
Milei’s economic policies show the first signs of success. In his speech, he highlighted how peso futures are aligning with the central bank’s incremental adjustment strategy and that the central bank is moving towards neutral net reserves.
Milei assured that he will go ahead with the reforms “despite the politics”. He said that the Senate is recent rejection of his bills was an opportunity to unmask corrupt politicians, those “who do not want to give up their jobs and try to maintain their privileges”. Looking to the future, said the Argentine president plans introduce 3,000 more reforms after the 2025 congressional elections.