Trump’s Economic Cuts Hit Virginia and New Jersey Hard: Job Losses Mount

Federal Policies and Economic Pressures Create Devastating Workforce Crisis

Virginia and New Jersey are experiencing unprecedented job losses as President Trump’s aggressive federal cuts combine with a sluggish housing market to create a perfect storm for workers. Virginia leads the nation with 43,000 job losses in the second quarter alone, marking the most dramatic employment decline since the pandemic’s peak.

The numbers tell a stark story. After gaining jobs consistently since April 2020, Virginia has now shed workers every month since February. This reversal coincides with Elon Musk’s Department of Government Efficiency (DOGE) slashing federal contracts and a housing market slowdown shuttering factories across the region.

The DOGE Factor: When Efficiency Becomes Destruction

Trump’s promise to slash government waste through DOGE has translated into real pain for American workers. The department has cut federal spending by targeting contracts that employ thousands of Virginia and New Jersey residents, many working for defense contractors and research organizations.

“The changes occurring in the federal government have brought significant challenges for many federal contractors, including AIR,” said Dana Tofig, spokesperson for the American Institutes for Research, which announced 233 layoffs in Virginia and 50 in Maryland.

The cuts haven’t been surgical. Critics argue DOGE has “done nothing to improve the quality of services” the government provides while creating longer wait times and degraded services across multiple agencies.

Virginia Bears the Brunt: Federal Contractors Hit Hard

Northern Virginia, historically sustained by federal contracting, faces unprecedented challenges as DOGE targets what it considers unnecessary spending. The region lost major contracts including:

• 442 workers at Mitre Corporation after $28 million in canceled federal contracts
• 233 layoffs at American Institutes for Research
• $50 million in coastal flooding contracts canceled in Hampton Roads

Jay Ford of the Chesapeake Bay Foundation told a state legislative committee that the cuts targeted projects with “buzzwords like ‘climate’ or ‘resilience,'” including $20 million to address flooding in Hampton where nearly 25% of homes sit in flood zones.

“This is work that you desperately needed,” Ford explained. “There was a real focus on certain buzzwords like ‘climate’ or ‘resilience,’ and I think people conflated some of these projects as somehow unnecessary.”

Housing Market Collapse Compounds Problems

The economic pain extends beyond federal cuts. Georgia-Pacific shuttered a plywood factory in Southern Virginia, eliminating 554 jobs as housing sales hit 30-year lows.

“Housing affordability challenges and a 30-year low in existing home sales are impacting our plywood business,” the company stated, noting that their products are primarily used in repair and remodel projects that typically occur when homes change ownership.

This closure devastates Virginia’s economically distressed “Wood Basket” region around Emporia, already reeling from the indefinite closure of a nearby Boar’s Head plant that employed 600 people following a deadly listeria outbreak.

New Jersey: Retail and Pharma Carnage

New Jersey shed 15,400 jobs in the second quarter, driven by retail closures and pharmaceutical industry struggles. Major layoffs include:

• 481 workers at Walmart’s Hoboken corporate office
• 1,122 employees at Rite Aid stores amid bankruptcy proceedings
• Hundreds of positions at Bristol Myers Squibb and Novartis due to patent expirations

The retail sector faces particular pressure from reduced consumer spending, increased shoplifting, and pharmacy chains battling opioid-related lawsuits.

Economic Warning Signs Flash Red

The job losses signal broader economic fragility, according to experts monitoring state finances. Lucy Dadayan of the Urban-Brookings Tax Policy Center warns that rising unemployment combined with weak revenue growth creates dangerous conditions.

“I think the dramatic May and June jobs revision signals economic fragility,” Dadayan explained. “State-level warning signs suggest the impacts will show gradually.”

National unemployment reached 4.2% in July, matching 2024 levels but rising from recent lows of 3.4% in April 2023. Virginia shows among the largest unemployment increases nationally.

The Human Cost of Government “Efficiency”

Behind the statistics are real families facing uncertainty. Amanda Goodall, a workforce analyst known as “The Job Chick,” emphasizes that layoff rates in Virginia, New Jersey, and Vermont reflect genuine corporate restructuring rather than statistical anomalies.

“These are not statistical flukes. They reflect real corporate moves, in New Jersey and Virginia especially,” Goodall stated. “The bigger issue is that nobody on the ground cares what the unemployment rate says if they can’t find an interview for a job they’re qualified for.”

The data reveals a troubling disconnect between political promises of efficiency and the lived experience of American workers losing their livelihoods.

DOGE’s Questionable Success Claims

Musk has claimed $150 billion in savings from DOGE operations, though budget experts question these figures. The Partnership for Public Service estimates that firings, rehirings, severance pay, and lost productivity will cost taxpayers $135 billion this fiscal year.

“It’s burning down government capability,” said Max Stier, president of the Partnership for Public Service. “It’s unquestionably clear that they are firing people willy-nilly and are disrupting government services without any understanding of the consequences.”

Looking Forward: Economic Uncertainty Ahead

As Musk steps back from DOGE leadership, the full impact of federal cuts continues unfolding. The more definitive Quarterly Census of Employment and Wages, due December 3, will provide clearer state-level patterns.

Meanwhile, communities like Emporia struggle to attract new industries while existing businesses face transportation cost increases due to factory closures. State lawmakers work to find solutions, but recovery requires sustained effort and investment.

The contrast with states like California and Texas, which added jobs in the second quarter, highlights how federal policy changes affect regions differently based on their economic foundations.

The Path Forward: Accountability and Action

Virginia and New Jersey’s job losses demonstrate the real-world consequences of aggressive federal spending cuts combined with broader economic pressures. As unemployment rises and services degrade, citizens must demand accountability from leaders who promised efficiency but delivered disruption.

Call to Action: Contact your representatives to demand comprehensive job creation strategies that rebuild the middle class while maintaining essential government services. Share this story to help others understand how federal policies directly impact local communities.