Federal Worker Layoffs Threaten Cornerstone Industry For Maryland

By Capital News Service, Maryland Matters

June3,2026

Maryland, home to federal agencies, military installations and tens of thousands of contractors, has long relied on employment and a steady flow of money from the U.S. government.

In a given year, Maryland draws about $150 billion in federal contracts, grants, salaries and other sources of funding, according to a recent report on federal layoffs from the University of Maryland’s business school and the state comptroller’s office. More than almost any other state, Maryland depended on the economic boon that came from its proximity to the nation’s capital.

But since President Donald Trump returned to office early last year and vowed to reshape the federal government, Maryland has lost more than 31,000 federal jobs — about a 15% reduction.

Maryland’s Secretary of Commerce Harry Coker Jr. called the federal layoffs “tragic” and said they have had a ripple effect across the state’s economy.

“No state has been impacted to the degree that Maryland has with regards to the number of federal jobs lost,’’ he said. “That is tragic for those individuals and their families and their loved ones.’’

Christopher Meyer, a research analyst at the Maryland Center on Economic Policy, said that over the past few years, the state’s economy was strong in many areas but has grown more slowly than the U.S. overall.

The federal cuts aren’t helping.

A region reshaped

Federal layoffs in Maryland a year later. Second in a series.

“Fewer good jobs — federal jobs — available in the state does mean that we’re going to be a less attractive place for families to locate,” he said. “That also makes us less attractive for businesses because of less demand from those relatively well-paid federal workers.”

Fewer federal jobs mean families lose income, Meyer said, which leads to less spending at the local level, putting strain not only on state and local governments but also on private businesses.

Meyer noted that despite the cuts, Maryland still has a sizable federal workforce. But he said, they have had a “pretty serious impact.”

What are the numbers?

Nearly 230,000 Marylanders are employed by the federal government in both defense and non-defense positions, according to the layoffs report. Those jobs account for about $26.9 billion in wages.

Residents across the state have and will continue to feel the impact of the cuts, officials said. The federally funded Beltsville Agricultural Research Center is slated for closure. The U.S. Agency for International Development was dismantled and the staff of the U.S. Department of Health and Human Services was reduced.

Cuts to federal jobs and layoffs of federal workers in Maryland have resulted in billions in lost revenue for the state, according to the report.

“What’s happening in Washington is not only unfair, it’s just unconscionable,” said Del. Denise Roberts, D-Prince George’s. “These [layoffs] affect real people, real lives, people who have mortgages, people who have to pay the rent, people who have children. What are they supposed to do now?”

The cuts have also been felt in the state’s finances.

Amid an already difficult budget environment, Gov. Wes Moore and the Maryland General Assembly once again had to close a projected spending shortfall of more than $1 billion this past legislative session.

What’s the reaction?

Coker, the state commerce secretary, said beyond the people directly affected, the mass layoffs have impacted Maryland’s economy.

“There’s also consultants, engineering firms, logistics firms, that support some of those federal departments and agencies that have been cut back,” he said. “That has also increased the amount of jobs that we’ve lost in Maryland as a direct result of some of the policies coming out of Washington.”

He also said the layoffs have reduced spending, which affects the state’s economy as a whole.

“There’s a ripple effect when we don’t have money in our pockets,” Coker said. “When we lose our jobs, we don’t do as much grocery shopping, we don’t take vacations.”

State lawmakers have worked to support federal workers who’ve lost their jobs.

The General Assembly passed the Protect Our Federal Workers Act last April, which pulled money from the rainy day fund to create a no-interest loan program for laid-off federal workers in Maryland.

It also expanded the power of Maryland’s attorney general to try and protect residents from federal decisions and created a fast-track hiring program for former federal workers aiming to transition to state jobs.

Last year, Moore also launched a support system for laid-off federal employees, which includes legal assistance, housing resources, emergency relief funds and career transition help.

“Marylanders are paying the highest price,” Moore said in an October statement. “These are dedicated public servants who devote their careers to keeping our food safe, maintaining public health and ensuring our seniors, veterans and children receive the support they need. Our citizens’ lives and livelihoods are being pushed even further into jeopardy.’’

Maryland Matters is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501(c)(3) public charity. Maryland Matters maintains editorial independence. Contact Editor Steve Crane for questions: scrane@marylandmatters.org. Follow Maryland Matters on Facebook and Twitter.