The Social Security Administration (SSA) said in a release that it has identified more than $800 million in savings or “cost avoidance” for fiscal 2025 among information technology, grants, property and payroll.
The SSA stated that it froze hiring and “drastically” cut back on overtime, saving about $550 million.
The government agency that administers the Social Security program said it cut back $150 million from the information technology systems (ITS) budget by canceling “non-essential contracts and identifying reductions in other ITS contracts.”
Acting SSA Commissioner Lee Dudek said Monday evening the agency has “operated on autopilot” for far too long.
“We have spent billions annually doing the same things the same way, leading to bureaucratic stagnation, inefficiency, and a lack of meaningful service improvements,” Dudek said in a statement. “It is time to change just that.”
The SSA said it made a 70 percent reduction in travel, saving to the tune of $10 million. The agency said it also terminated $15 million in contracts and another $15 million in grants.
Other aspects that have seen reductions within the SSA are postage, printing, protective security officers and property.
The SSA began notifying workers last week that “significant workforce reductions” are about to take place as part of an “agency-wide organizational restructuring.” Up to 7,000 employees are expected to be let go, The Associated Press reported.
The SSA said the agency’s offices that complete functions that are not “mandated by statute may be prioritized for reduction-in-force actions that could include abolishment of organizations and positions, directed reassignments, and reductions in staffing.”
The expected layoffs come as President Trump’s administration has ramped up its firing of federal government workers, particularly those in probationary status, with about 20,000 being cut in recent weeks.
Former SSA Commissioner Martin O’Malley warned that recent cuts at the agency at the hands of the Department of Government Efficiency could lead to a “collapse” of the Social Security system “within the next 30 to 90 days.”
“Ultimately, you’re going to see the system collapse and an interruption of benefits,” O’Malley said. “I believe you will see that within the next 30 to 90 days.”
