Experts say IRS layoffs could have significant impact on Kansas City economy, labor market

KANSAS CITY, Mo. (KCTV) – Hundreds, possibly thousands of IRS workers in Kansas City could be let go as the Trump Administration continues its mass firings of federal workers.

The move would impact probationary employees.

Economists are now warning this could have a ripple effect on the local economy.

“As the employment goes, so does the economy,” said Dr. Donna Ginther, Roy A. Roberts & Regents Distinguished Professor of Economics at the University of Kansas.

The cuts won’t just affect those at risk.

“It’s going to spill over into every other business in the Kansas City area, if you go from spending on movies and restaurants and shopping and cars and houses,” explained Dr. Ginther. “You’re only spending the necessities that you need to make due, given that your income is gone away, economic activity is going to be affected throughout the metro,”

Ginther said she doesn’t believe the labor market in Kansas City can absorb these types of cuts. She shared with KCTV5 that the latest data shows 2,800 jobs available for those with a bachelor’s degree in Kansas City.

“If 1,000 people lose their job at the IRS, those job postings may not match perfectly with the skills these IRS employees will have,” stated Ginther.

The unemployment rate in Kansas City is about 3.6% as of December 202. If the layoffs happen, she said it will creep up.

Meanwhile, Kansas City Mayor Quinton Lucas spoke with KCTV5 about the layoffs for the first time, agreeing it will be detrimental to the community.

“These are people who live in our neighborhood, shop in our stores, important consumers for all of us, this is not just a theoretical rounding error for some folks in Washington or whatever the heck they are,” said Mayor Lucas.

The mayor made clear that it’s not just a job, it’s people’s livelihood and Kansas City’s future on the line.

“This is about people here in Middle America, cutting these jobs cuts opportunities in Middle America, that is a challenge for all of us,” said Lucas. “I’m praying for our workers, I’m thinking about all of us but more than anything I hope there’s a change in course before we see layoffs like these.”

As of Wednesday evening, KCTV5 had not heard any word of layoffs beginning.

A union rep for the IRS said if the layoffs don’t happen Wednesday, they could happen sometime this week.

Copyright 2025 KCTV. All rights reserved.