Argentina’s new President Javier Milei signed a decree on Dec. 26 stating that his government won’t renew contracts for the thousands of government workers hired since Jan. 1, according to reports. This decision is part of wider efforts to slash government spending amid the backdrop of the country’s troubled economy. However, the decree includes exceptions, such as in cases where workers were hired as part of “quotas regulated by law or other types of special protections,” including those with disabilities or personnel who are considered “indispensable.” The decree also noted that other government contracts made before 2023 will also undergo an “exhaustive review” in the next 90 days. Mr. Milei’s government estimates that more than 5,000 workers will be impacted by the job cuts, although the Association of State Workers (ATE), a workers union, anticipates some 7,000 employees could lose their jobs.
In response to the planned layoffs, the ATE General Secretary Rodolfo Aguiar announced that the union plans to mobilize in various parts of the country to protest the decree. He stated that the workers perform essential tasks that are crucial to the functioning of all areas of the state, regardless of their contractual relationship. He warned that if the government moves forward with these layoffs, the entire community will be affected.
President Milei, who was inaugurated as Argentina’s new president on Dec. 10, has called for a new era of “peace and prosperity” while warning of an economic “shock” as a result of the various reforms he plans to introduce in an effort to transform the struggling economy. Inflation in Argentina has surged and the government’s failure to take responsibility for this has led to widespread dissatisfaction. Along with reforming government spending and payrolls, Mr. Milei has also vowed to allow the privatization of state-owned media companies and state-run oil and gas firms such as oil giant YPF as a way to boost exports and investment in Argentina. His government is also planning to make cuts to energy and transportation subsidies and shut down some government ministries to reign in government spending.