Argentina's 'Chainsaw' President Begins Restructuring... Temporarily Lays Off 5,000 Public Officials

Total Civil Servants Reach 3.4 Million
Milley: "The Path to National Reconstruction Begins"

The Argentine government has attracted international attention by announcing plans to lay off as many as 5,000 public officials at once. This is interpreted as a signal that the policy drive of newly inaugurated President Javier Milei, who had been warning of large-scale restructuring of the public sector while carrying a chainsaw during the presidential campaign, has officially begun.

During the presidential election period last September, Argentine President Javier Milei was seen campaigning while holding a chainsaw. [Image source=AP·Yonhap News]

On the 26th (local time), Manuel Adorni, spokesperson for the Argentine presidential office, stated at a press conference held that day, "We have decided not to extend the contracts of public sector contract workers hired as of January 1 this year, whose contracts end on December 31." According to this policy, about 5,000 public officials who performed administrative support and simple repetitive tasks were temporarily laid off.

Adorni further indicated the possibility of additional layoffs by saying, "For this year's contract workers, decisions will be made after a 90-day review period." According to the local daily La Naci?n, if more than 2,000 additional layoffs follow, the total reduction scale is expected to be around 7,000.

This restructuring was a measure already anticipated after President Milei's election. Earlier, on the 10th, newly inaugurated President Javier Milei declared in his inaugural speech, "Those employed due to political connections not only contribute nothing to the nation but also rob productivity, work, and wages from employees who want to work," signaling a large-scale restructuring of the public official organization.

Until now, Argentina had been called a "public servant paradise" as it increased employment through the government public sector amid worsening employment stagnation due to economic recession. As of February, the number of salaried workers in the public sector alone was 3,413,907, exceeding 7.4% of the total population of 46 million. This number of public officials was overwhelmingly large compared to other countries, including South Korea, where the figure is usually in the 2% range.

In particular, most of these public sector workers were not employed based on demand, and over the past decades, political patronage, nepotism, and even various forms of corruption have flourished, producing various side effects.

President Milei, an economist by training, emphasized the need to reduce the public official organization during his presidential campaign while campaigning with a chainsaw in hand. He strongly criticized, saying, "People who should be in the private sector are entrenched in the public service," and that they are draining Argentina's finances and welfare.

In fact, Argentina is facing not only fiscal difficulties but also a very severe overall economic crisis. Last month, the consumer price inflation rate reached 160.9% year-on-year, with pessimistic forecasts suggesting it will soon reach 200%. The Argentine government is urgently pursuing peso devaluation, various subsidy cuts, privatization of state-owned enterprises, and large-scale restructuring.