In this installment, we focus on Project 2025’s proposed elimination of 2 million federal civil service positions and the transformation of the remaining positions to at-will employment. Understanding these potential changes is crucial for preparing and safeguarding the workforce of tomorrow.

This series examines Project 2025’s potential effects on corporate governance, finance, and human capital. In previous installments, we explored workforce-related immigration challenges and the backlash against diversity, equity, and inclusion initiatives. Future columns will discuss workers’ rights and financial security, particularly through proposed changes to the Department of Labor (DOL), the National Labor Relations Board (NLRB), and the Equal Employment Opportunity Commission (EEOC).

As we approach a critical juncture in workplace regulation, the Heritage Foundation’s Project 2025 presents a vision that could fundamentally alter the American labor landscape. According to the Bureau of Labor Statistics (BLS), these changes would affect approximately 168.7 million American workers in the current labor force.

A fundamental shift proposed by Project 2025 is the transformation of federal civil service positions into at-will employment. This change would give the executive branch unprecedented power, allowing for the dismissal of tens of thousands of federal employees at the President’s discretion. This is a clear example of how Project 2025 seeks to undermine the checks-and-balances system envisioned by the nation’s founders, eroding the balance of power between the three branches of government and signaling a weakening of democracy itself. This is a critical point, because it demonstrates how the project seeks to consolidate power within the executive branch.

The Impact of Transforming Federal Civil Service to At-Will Employment

Project 2025 proposes transforming federal civil service employment into at-will positions. Currently, approximately 60% of federal workers are unionized, which represents about 32.2% of all public-sector employees.

A drastic reduction in the federal workforce would have widespread implications for the public, affecting essential services, economic stability, and national security. Here’s how the everyday person might feel the impact:

• Delays and decreased efficiency in public services including social security and Medicare, passport processing and IRS services, as well as veterans’ benefits.
• Increased health and safety risks including fewer inspectors at the FDA and USDA, air travel and safety and disaster response.
• Economic and job market consequences including fewer stable middle-class jobs, impact on local economies with unemployment of federal employees in cities across the United States, and weaker consumer protections.
• National security and law enforcement challenges including weaker security resources, cybersecurity risks and military readiness.
• Environmental and infrastructure impacts including weaker environmental protections and slower infrastructure development.
• Erosion of government accountability with fewer whistleblowers and watchdogs and increased political appointments.

While advocates of federal workforce reductions argue that it would reduce government spending, the consequences for the general public could be severe service disruptions, economic instability, and weakened national security.

How Federal Employment Policies Have Shaped Private-Sector Workforce Standards

Public sector employment policies have historically set precedents that influence private-sector human capital practices, shaping workplace protections, compensation standards, and labor relations. While the federal government does not directly regulate all private-sector employment practices, its policies often serve as a model for best practices, drive legislation that extends to private employers, and establish expectations for fair employment standards. These events are examples of how Federal policies impacted private sector policies:

1. The New Deal & Labor Rights Expansion (1930s-1940s)

During the Great Depression, the federal government played a crucial role in establishing workplace protections that later influenced the private sector. Key developments included:

• The Fair Labor Standards Act (FLSA) of 1938 – Established minimum wage, overtime pay, and child labor protections for government workers, later extending to private-sector employees.
• The Wagner Act (1935) – Strengthened labor unions by guaranteeing collective bargaining rights, setting the stage for private-sector union growth.

2. Civil Rights & Equal Employment Policies (1960s-1970s)

The federal government led the charge in anti-discrimination policies that shaped private-sector HR practices:

• Executive Order 11246 (1965) – Required affirmative action in federal hiring, influencing private government contractors and later expanding to corporate DEI programs.
• The Civil Rights Act of 1964 – Banned employment discrimination based on race, gender, religion, or national origin, applying to both public and private employers.
• The Equal Pay Act (1963) – First applied to federal workers, but later influenced corporate pay equity laws.

3. Federal Worker Benefits Leading Private Sector Trends (1980s-2000s)

• The federal government has often been an early adopter of workplace benefits, pushing private companies to follow including: the Family and Medical Leave Act (FMLA) of 1993 – Originally applied to federal employees, then expanded to private companies with 50+ employees; Telework and Work-Life Balance Policies; Defined Benefit Pensions to 401(k) Transition.

4. Federal Response to Workplace Health & Safety (2000s-Present)

• Workplace Safety & OSHA Compliance – The federal government strengthened workplace safety standards, leading to improved private-sector safety regulations.
• Pay Transparency & Compensation Equity – Federal agencies began enforcing pay transparency rules, pushing corporations toward more transparent salary structures.
• COVID-19 Pandemic Policies – Federal worker protections (e.g., expanded sick leave, remote work mandates) influenced private employers’ response to health crises.

The Ripple Effect: How At-Will Federal Employment Could Reshape the Private Sector

The transformation of federal employees to at-will status would likely weaken job protections, increase political influence in hiring, and create regulatory uncertainty—all of which would spill over into private-sector employment norms.

Key concerns for private sector workers:

• Weaker job security & benefits as federal employment stops setting a high standard.
• Reduced bargaining power for unions, making it harder for private-sector employees to negotiate contracts.
• More instability in regulatory oversight, making long-term business planning harder.
• Increased political influence in hiring & firing, particularly for companies that do business with the government.
• Higher compliance costs and economic uncertainty, especially in highly regulated industries.

The Path Forward for Private Sector Corporations in Response to Federal Workforce Changes

As federal human capital policies shift—potentially weakening job protections, benefits, and regulatory oversight—private sector corporations must adapt strategically. While some companies may take advantage of deregulation and reduced compliance costs, others will need to balance employee retention, corporate reputation, and long-term sustainability in an evolving labor landscape. Here’s how corporations can navigate these changes:

1. Strengthen employer-driven job security and workplace protections as employees may demand greater job stability if federal employment protections weaken;
2. Take a proactive approach to talent retention and employee engagement as companies may face increased competition for skilled workers;
3. Navigate regulatory uncertainty with compliance agility as companies may face challenges as compliance oversight becomes more politicized;
4. Maintain ethical standards as pressure from investors may increase in light of less rigorous governmental oversight;
5. Rethink union and workforce relations strategy as reduction in oversight may potentially strain employer-employee relations.

Conclusion: Safeguarding the Workforce in an Era of Uncertainty

Project 2025 represents a fundamental shift in the structure of federal employment, one that extends far beyond the government workforce. The transformation of federal positions into at-will employment, coupled with the elimination of millions of jobs, is not merely a bureaucratic restructuring—it is a direct challenge to the stability of public services, national security, and economic resilience. The ripple effects will be felt in corporate governance, private-sector workforce policies, and the broader labor market, with potential consequences for job security, regulatory oversight, and workplace protections.

For businesses, the coming years will require a delicate balance between adaptability and responsibility. While some corporations may capitalize on deregulation and workforce flexibility, those that prioritize stability, ethical employment practices, and regulatory foresight will likely emerge stronger. Employers who proactively invest in job security, talent retention, and governance transparency will not only safeguard their workforce but also position themselves as leaders in an evolving labor landscape.