The administration of President Javier Milei is preparing a new phase of public-sector reductions scheduled to begin in 2026, aiming to further shrink the size of the state and reinforce a leaner, more efficient government structure. The plan is expected to cut approximately 10% of the remaining workforce, focusing primarily on decentralized agencies and administrative bodies rather than core executive functions.

Over the past year and a half, the government has already executed one of the most significant public-sector reorganizations seen in decades. Early adjustments removed thousands of positions tied to redundant programs, political appointments, or areas with overlapping functions. The next stage seeks not only to lower fiscal pressure but also to consolidate a new administrative framework built on performance, transparency, and resource optimization.

Why This Move Strengthens Milei’s Economic Model

Milei’s philosophy has been consistent from day one: a smaller state means lower costs, less bureaucratic friction, and a more competitive economy. By cutting excess payroll, the government expects to redirect funding toward strategic areas such as security, infrastructure, education quality, and private-sector stimulus. A state apparatus that is lighter and more results-driven supports lower deficits, better credit perception, and long-term macroeconomic stability.

This adjustment also represents a cultural shift. For years, the state in Argentina grew beyond its capacity, absorbing employment as a substitute for private-sector dynamism. Milei is attempting to reverse that logic — replacing dependency with productivity, and re-establishing merit and efficiency as the core of public management.

What to Watch Moving Forward

• Implementation speed and union response
• Preservation of essential services during restructuring
• Gains in fiscal savings and administrative performance
• Private-sector absorption of labor over the next cycle

If the reform advances without disruption, the transformation could redefine the role of the state for an entire generation — smaller, more agile, less expensive, and more aligned with global standards.