Indiana State Employee Layoffs: Budget Cuts Lead to Job Losses Across Agencies

Dozens of Indiana state employees have been laid off as the state government implements sweeping budget cuts, marking one of the most significant workforce reductions in recent years. The layoffs come after Governor Mike Braun signed Indiana’s new two-year spending plan, which reduces operational funding for multiple agencies across education, commerce, and public services.

Indiana Layoffs Spark Concern Across Agencies

The first round of Indiana state employee layoffs included nearly 50 workers across education-related departments. Agencies under the education vertical faced the heaviest reductions:

• Indiana State Library – 16 employees laid off
  
  
• Indiana School for the Deaf – 14 employees laid off
  
  
• Indiana Department of Education – 6 employees laid off
  
  
• Indiana Commission for Higher Education – 3 employees laid off
  
  

In addition, the Indiana Historical Bureau part of the State Library saw five of its six staffers let go, leaving just one person to manage more than 750 state historical markers and other public history initiatives.

Officials confirmed that 43 more positions will remain unfilled, bringing the total staffing reductions in education to nearly 90.

Authoritative Source:

According to the Indiana Department of Education and statements to the Indiana Capital Chronicle, these reductions are part of a broader response to budget shortfalls across state agencies.

Layoffs in Indiana’s Commerce Sector

Beyond education, the Indiana Economic Development Corporation (IEDC) and related agencies also saw cuts:

• IEDC reduced 8 staff positions this week, part of a total of 12 cuts across commerce.
  
  
• Indiana Destination Development Corporation laid off 3 workers.
  
  
• The Governor’s Workforce Cabinet reduced its team by 1 position.
  
  Altogether, more than $7 million in annual savings are expected from these commerce-related cuts.

Statewide Impact on Indiana Employees

The layoffs add to an already shrinking workforce. According to state data from the Indiana Transparency Portal, Indiana’s total government employees dropped from 32,212 in December 2024 to 31,513 in June 2025 a loss of almost 700 positions.

Meanwhile, Ivy Tech Community College also announced layoffs of more than 200 employees due to reduced state funding. These workforce challenges in Indiana reflect a broader national trend. For example, recent State Department RIFs show how federal agencies have also carried out large-scale reductions in force, affecting thousands of employees across multiple bureaus.

The new budget not only imposes layoffs but also directs agencies to withhold additional funds, compounding the financial strain.

Why Indiana Budget Cuts Are Happening

The layoffs stem from a $2 billion budget shortfall, which lawmakers scrambled to address in the final days of the legislative session. To balance the books, leaders approved reductions across nearly all agencies.

Key cuts include:

• Indiana State Library: Budget reduced nearly 30%, from $3.7 million to $2.6 million annually.
  
  
• Indiana Economic Development Corporation: Budget reduced about 25%, from $100 million to $74 million.
  
  
• Indiana State Museum: Budget reduced from $11.2 million to $10.6 million.
  
  

Governor Braun has defended the cuts as “fiscally responsible” and essential for long-term stability. Critics, however, warn that reduced staffing could disrupt public services, education programs, and economic development initiatives across the state.

What This Means for the Future

The Indiana layoffs highlight a challenging period for state employees and Hoosiers who rely on government services. With agencies forced to operate under smaller budgets, many programs may scale back or disappear altogether.

The true impact of these cuts will unfold in the months ahead, as agencies adapt to new funding levels and residents feel the effects of fewer resources.

How We Can Help

Navigating the uncertainty of state employee layoffs can be stressful, whether you are directly affected or planning your career in the public sector. Our team at State Pension Advisors  specializes in providing guidance and support for professionals facing workforce changes.

We can help you:

• Understand your employment options and benefits
  
  
• Access career resources and retraining programs
  
  
• Plan for financial stability during job transitions
  
  
• Explore new opportunities in state or federal agencies
  

If you’re looking for advice or support during this challenging time, our services are designed to help you take control of your career and move forward with confidence. Book your free 30-minute consultation today and get personalised guidance tailored to your situation.

Frequently Asked Questions (FAQ)

What state has the most layoffs?

Layoff numbers vary depending on economic conditions, but states with large populations and major industries like California, Texas, and New York often report the highest number of layoffs nationwide. Indiana is now seeing significant workforce reductions due to state budget cuts.

Are state of Indiana employees getting a raise in 2025?

No. Instead of raises, Indiana has implemented hiring freezes and layoffs of state employees in 2025 due to budget shortfalls. Agencies are working with reduced funding, making salary increases highly unlikely this year.

What are the layoff laws in Indiana?

Indiana follows at-will employment laws, meaning employers can terminate employees at any time, for any lawful reason, unless a contract states otherwise. However, large-scale layoffs may be subject to the federal WARN Act, which requires advance notice in some situations.

Is working for the state of Indiana a good job?

Working for the state of Indiana offers stability, benefits, and retirement options under normal circumstances. However, the current round of layoffs highlights that state employment is not entirely immune to economic or political changes. For many, it remains a solid career option, but job security can vary with budget conditions.

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