Big U.S. state projected to lose jobs this year due to mass federal layoffs, tariffs

The Commonwealth of Virginia, one of the largest states economically in the nation, has been projected to have a net loss in job growth as a result of mass federal layoffs in Washington and tariff fallout.

Republican Virginia Governor Glenn Youngkin.

The economic forecast released by the Weldon Cooper Center for Public Service at the renowned University of Virginia showed that as of August 2025, Virginia is expected to lose more than 9,000 government jobs and 32,000 total jobs in this year alone, and 2026 to potentially have very minimal improvement.

The Weldon Center frequently posts economic forecasts like these locally, with another expected to be released in the fall.

"We expect 2026 to be weaker now, basically zero percent job growth – so flat, which is not something you want," stated executive director Eric Scorsone. "Generally, you want job growth. If you look at the last decade, we were growing closer to two percent. So, the difference between zero and two percent is actually quite significant."

"Another thing that you might see is companies postponing investment because simply they don't expect the economy to be so strong [or] people willing to spend so much money," reacted University of Virginia economist Joao Ferreira. "And so, they might start postponing new investment, which also feeds the capacity of the economy to recover from these types of slowdowns."

Virginia's economy is in part from federal employment, especially due to its close proximity to the District of Columbia. NoVa counties like Loudon and Alexandria have been especially hit as they faced the aftermath of Trump administration-related spending cuts in several departments and agencies which contain facilities in the DC-Virginia-Maryland area.

However, tariffs have and will also play a role as nationally, companies began laying off employees due to inflationary pressures.

Virginia governor Glenn Youngkin has repeatedly touted making a strong economy through tax cuts, deregulation, and other business incentives, however this news represents a final blow hurting his overall term performance at the last minute.