The Department of Veterans Affairs has experienced an unprecedented reduction in its workforce, potentially losing an estimated 40,000 employees in fiscal year 2025, according to a report released by members of the Senate Veterans’ Affairs Committee. Lawmakers warn that the losses – especially in clinical and front-line positions – are already impacting care and benefits delivery for millions of veterans.

VA Workforce Loses 40,000: What It Means for Federal Managers

When issues arise, agency heads, Congress, and even the public may be looking to place blame – federalmanagers and supervisors are at risk of getting caught in the crosshairs. A professional liability insurance(PLI) policy from FEDS Protection can help give employees the peace of mind they need to do their jobseffectively in understaffed, high-visibility environments.

A Historic Workforce Reduction

The recent Senate report found that 2025 marked the first year the Department of Veterans Affairssaw a net loss of employees after years of growth. While VA leadership had planned to reduce staffingthrough voluntary separation incentives and attrition, the actual net decline exceeded 40,000 positions.

The vast majority of these departures – roughly 88% – came from the Veterans Health Administration,which delivers care to veterans nationwide. Significant net staffing losses included:

• About 3,000 registered nurses
• Approximately 1,000 physicians
• Hundreds of custodial staff, social workers, and claims processors

Historically, VA workforce counts grew year over year, often adding more than 10,000 employeesannually. The sudden contraction marks a dramatic operational shift.

Reported Impacts on Veterans

Lawmakers led by Sen. Richard Blumenthal (D-Conn.) argue that these staffing declines are affectingaccess, quality, and timeliness of care. VA facilities are reportedly still operating under staffing caps evenafter lifting a partial hiring freeze, slowing efforts to backfill positions.

Senate Democrats cite concerns about:

• Longer appointment wait times
• Greater strain on mental health services
• Delays in processing benefits claims

Why This Matters for Federal Managers

Periods of workforce reduction and shifting policy priorities often bring increased professional risk andscrutiny for federal employees. This is especially true for supervisors and managers, whose decisionsmay become subject to expanded documentation requirements, heightened scrutiny, and increasedexternal oversight from Congress. The operational environment at VA agencies may become morecomplex and exposed.

Heightened oversight means that routine managerial actions can trigger claims of mismanagement ormisconduct that lead to investigations, administrative action, and possibly civil lawsuits, even whenthese decisions were made in good faith. When this happens, it is crucial that federal managers have thetools they need to protect themselves – FEDS Protection can help.

How FEDS Protects Federal Managers

At FEDS Protection, we recognize that federal employees – particularly supervisors, managers, andother leaders – face elevated exposure in today’s climate of heightened oversight and workforcechange.

A FEDS Protection professional liability insurance (PLI) policy can provide peace of mind to federalemployees.

As the PLI provider endorsed by leading federal manager associations, FEDS Protection offers coverageoptions that include:

• Civil liability protection for attorney’s fees and indemnity costs
• Legal representation coverage for administrative actions
• Criminal defense cost coverage

Annual premiums start at $290, and many federal supervisors and managers are eligible forreimbursement of up to 50% of their policy cost through their agency.

To learn more about how a FEDS Protection PLI policy can help safeguard your role as a federalmanager, visit www.fedsprotection.com or call (866) 955-FEDS, Monday–Friday, 8:30 a.m.–6 p.m. ET.

This article is provided for informational purposes only and does not constitute legal advice. Coverage issubject to policy terms, conditions, limitations, and exclusions.

Are You Leaving Federal Service and Considering Government Contracting?

If yes, consider FEDS Protection for your government contracting insurance needs. At FEDS Protection,we also support Federal Contractors by providing insurance coverage specifically tailored to meet theunique needs of today's federal contractors, including Professional Liability, Defense Base Act Insurance,and Foreign Liability coverage. In our experience, many small businesses need assistance in navigatingthe insurance portion of a government RFP.

The federal government is our specific focus and area of expertise. If you are looking to review yourcurrent or upcoming DBA insurance, please contact us today!

Did You Know?

The Department of Labor was established in March 1913 and is responsible for federal labor laws thatgovern the welfare of job seekers such as occupational safety and health, minimum wage and hourstandards, and unemployment benefits.

FEDS Protection has proudly insured these civil servants for nearly two decades. We appreciate yourbusiness, loyalty, and feedback. Thank you for your tireless efforts promoting compliance towards therules and regulations that help foster and promote the well-being of wage earners across the country.

Testimonials

"In today’s challenging workplace, federal managers confront a wide array of decisions requiring split-second responses in a ‘do more with less’ environment. The purchase of professional liability coverage,as offered by FEDS, can provide those managers with a safety net should their decisions lead to forms oflegal review. I recommend any manager with the potential of such review to secure a policy of this typefor their financial protection." - Todd V. Wells, Executive Director, Federal Managers Association

Presentations & Webinars

Contact us if you or your agency are interested in a webinar or brochures that provide federalemployees with best practices on how to protect themselves with a federal employee professionalliability insurance policy like those offered by FEDS Protection. FEDS Protection webinars are a valuableresource for learning more about the specific professional exposures of federal employees, PLI ingeneral, and the FEDS Protection program. Check out our library via the link below to access contentthat speaks to your position in the federal government.