PHOENIX — On Tuesday, the Arizona Department of Economic Security told ABC15 it cut approximately 5% of its workforce due to changes at the federal administration.
ABC15 received multiple emails from employees, saying that layoffs were coming with the agency that helps Arizonans in multiple areas, from child care subsidies to unemployment help and much more. DES said staff were informed on Tuesday, June 17, with their final day being July 4.
The department said the cuts were happening due to the “elimination of federal grants supporting unemployment insurance and the federal government shifting costs to the states.”
It’s not immediately clear how many employees work at DES. The DES website says there are more than 8,000 team members, with a Fiscal Year 2026 budget request document last modified in August of 2024 that shows there are around 8,900 staff that oversee more than 60 different programs and services.
It’s also unclear which divisions would be affected; however, the statement provided by DES said not all of the departments under the agency are impacted.
Ray Leonard, a DES employee for approximately six years, told ABC15 he was notified he’s being laid off. Leonard says he works under the Division for Employment and Rehabilitation, specifically under unemployment help.
“I’m going to have to pull out my retirement and get that cashed out. It’ll help me out a little bit. I’ll survive, no matter what. it just, very, poor thing to do… not only to the employees but to the residents of Arizona that do rely on unemployment,” Leonard said
A full statement is below from DES:
Due to the elimination of federal grants supporting Unemployment Insurance and the federal government shifting costs to the states, the Department of Economic Security (DES) has eliminated positions, affecting approximately 5% of its workforce. Employees impacted by this decision were informed on June 17, 2025, providing two and a half weeks’ notice, with their final day being July 4.
“Implementing a reduction was not what we wanted, but it was necessary considering the current federal budget cuts,” stated DES Director Michael Wisehart. “Our agency is navigating a complex financial landscape shaped by unexpected federal funding reductions and threatened cost shifts to states. We have been closely monitoring our fiscal situation with a strong commitment to avoiding staff reductions. Despite implementing cost-saving measures to maintain workforce stability while addressing budget constraints, the financial challenges have persisted, making it impossible to sustain our current staffing levels. We cannot compensate for millions in funding cuts without significant impacts to clients.”
The Department remains committed to providing essential services, such as basic needs assistance, employment services, child and family services, and support for individuals with disabilities. As one of the largest state agencies, DES programs and services support the health, safety, and economic well-being of Arizonans. Although not all divisions within the Department were affected by the reduction, Director Wisehart emphasized that “our teams may require reorganization, and substantial adjustments will need to be made as we move forward with anticipated leaner budgets. Our commitment to delivering critical human services remains, and we are determined to tackle this situation with both resilience and resourcefulness.”
