President Milei to cut 70,000 state jobs, boasting of chainsaw austerity

President Javier Milei plans to fire 70,000 government workers in the coming months in one of the clearest signs yet of how the libertarian’s chainsaw-style approach intends to slash the swollen state.

Beyond the job cuts, Milei boasted Tuesday at an event that he’s frozen public works, cut off some funding to provincial governments and terminated more than 200,000 social welfare plans, which he labelled as corrupt. It’s all part of his strategy to reach a fiscal balance at any cost this year.

“There’s a lot of blender,” Milei said in an hour-long speech at the IEFA Latam Forum in Buenos Aires, referring to the erosion of wages and pensions by 276 percent annual inflation. “There’s a lot more chainsaw.”

While just a small fraction of Argentina’s 3.5 million public-sector workers, Milei’s job cuts are bound to face more pushback from the country’s powerful labour unions and could jeopardise his high approval ratings. One union representing some government workers went on strike Tuesday, while a government report detailed that private sector workers suffered the worst one-month wage loss in at least three decades once he took office in December.

The leader of the state workers union ATE quickly shot back on X, announcing a national strike without providing further details. 

Milei cited polls showing Argentines are more optimistic about the economy’s future, while a recent indicator of the public confidence in the government rose despite his austerity measures.

“People have hope, they’re seeing the light at the end of the tunnel,” Milei concluded. 

Other key points from Milei’s speech Tuesday: 

– Milei said peso futures contracts are aligned with the Central Bank’s two-percent monthly crawling peg scheme, labelling calls to sharply devalue the currency again “ridiculous”
– Argentina's Central Bank on the path to achieving net neutral reserves after starting with debt liabilities that surpassed cash on hand by US$11.5 billion in December
– Milei says he’ll double down on his attempts to reform the Argentine economy after 2025 congressional elections, with more than 3,000 reforms in the pipeline
– He described the Senate rejecting his emergency decree as “marvellous” because “it left all the dirty fingers” of exposed of politicians he calls “delinquents”
– Milei expects V-shaped economic recovery