Speaking from the Casa Rosada this morning, President Mauricio Macri announced that approximately 1,000 government officials working in the Executive branch are set to be cut from the federal government’s payroll.

These are the most relevant figures from the announcement:

  • Macri said the decision will save the state roughly AR $1 billion (US $76.6 million) a year. The 3,500 officials who currently hold those posts earn around AR $5 billion altogether, according to La Nación. The government has argued about the need to implement austerity measures and reducing public spending, and this is its way of leading by example. 
  • Reduction of the number of departments within ministries: ministries are currently able to have up to six secretariats, but the government reduced the number to five. Although not all of them have the maximum allowed – overall, there 20 ministries and 20 secretariats – some do have six and will have to get rid of one.
  • A portion of the 60,000 temporary contracts that are renewed yearly will be dropped. This is a common way of hiring for the state, since that way it avoids paying employees its pension and healthcare contributions. Illegal, but common.
  • Macri also said salaries have been frozen for the political staff that will survive the cull. No estimates were provided for any kind of savings for this measure. However, considering the government intends for wage negotiations to end up with agreements that are not higher than 15 percent, it is likely the decision represents the saving of said percentage over the money that will be destined to pay the salaries of those who will not be fired.