What Every New DoD Employee Needs to Know About 2025 Layoffs

When you’re new to a federal job—especially within the Department of Defense (DoD)—you expect challenges. But what happens when one of those challenges is a layoff?

In 2025, the federal government is reshaping its workforce, and DoD is no exception. Budget constraints, realignments, and evolving mission requirements have put probationary employees in a vulnerable position. If you’re in your first year or two of service, understanding your rights and options during a potential layoff is crucial.

This blog explains what probationary employees need to know during DoD workforce reductions, and how to protect your benefits, career momentum, and future financial plans.

What Is a Probationary Employee?

In most federal agencies, new hires serve a probationary period—typically one year, though it can be extended up to two years in some DoD roles. During this time, your performance, conduct, and suitability for federal service are evaluated.

Unlike permanent employees, those in probationary status do not have the same job protections, such as appeal rights or bump-and-retreat options during a Reduction in Force (RIF).

Why Probationary Employees Are at Higher Risk During Layoffs

Under current federal rules, agencies have more discretion when releasing probationary workers. If a RIF or restructuring affects your position, and you are within the probation period, you can be let go without going through the competitive RIF process that applies to tenured employees.

This means:

• No retention standing is calculated.

• No bump or retreat rights to take another job.

• Limited appeal rights through the Merit Systems Protection Board (MSPB).

However, that doesn't mean you’re powerless. Let’s explore how you can respond, plan, and potentially recover your federal career.

Key Rights and Limitations for Probationary Employees

Here’s what you can and can’t expect if you’re a probationary employee facing a DoD layoff:

1. Retention Standing

• Probationary Employee: Not calculated

• Permanent Employee: Determined based on tenure and performance

2. Appeal Rights to MSPB (Merit Systems Protection Board)

• Probationary Employee: Limited appeal rights

• Permanent Employee: Full appeal rights

3. Severance Pay

• Probationary Employee: Eligible if qualifications are met

• Permanent Employee: Eligible if qualifications are met

4. Priority Rehire Eligibility

• Probationary Employee: Not automatically eligible

• Permanent Employee: May qualify for priority placement

You may appeal if separation is due to discrimination or whistleblower retaliation.

Severance Pay: Do You Qualify?

Probationary employees may still be eligible for severance pay if specific conditions are met:

• You must have completed at least 12 months of uninterrupted service.

• You’re not eligible for immediate retirement.

• You were not offered another suitable position.

Severance is typically calculated based on your basic pay and years of service. While not a long-term solution, it can help bridge your finances during job loss.

What Happens to Your Benefits After a Layoff?

Let’s look at what happens to some of your most important federal benefits if you’re released during probation:

1. Thrift Savings Plan (TSP)

Your Thrift Savings Plan (TSP) account remains yours, even if you separate from service. You can:

• Leave it untouched (tax-deferred growth).

• Roll it over into a private IRA or employer plan.

• Withdraw (penalties may apply if under age 59½).

2. Federal Employee Health Benefits (FEHB)

You receive 31 days of free Federal Employee Health Benefits (FEHB) coverage after separation. After that:

• Coverage can be extended for up to 18 months through Temporary Continuation of Coverage (TCC).

• You’ll pay full premiums plus a 2% administrative fee.

3. Federal Employees Group Life Insurance (FEGLI)

Unless you convert it to an individual policy, Federal Employees Group Life Insurance (FEGLI) coverage will terminate 31 days after your separation.

4. Unemployment Insurance

Most probationary employees can apply for unemployment benefits through their state, depending on eligibility and the reason for separation.

Can You Return to Federal Service?

Yes and many do.

Although probationary release may feel like a major setback, there are pathways to return:

• USAJOBS: Reapply for open positions after updating your resume and skills.

• Direct Hire Authorities: Some DoD roles allow hiring without competitive rankings.

• Veterans’ Preference: If you are a veteran, special rehire rights may apply.

Tip: Keep all your documents (SF-50, performance evaluations, separation notice) in one place to use in future applications.

How to Protect Yourself Proactively

Even if you’re still in service, here are ways to strengthen your position:

1. Document Your Performance

Save emails, evaluations, and accolades. They’ll help in future hiring or appeals.

2. Keep Communication Open

Stay informed about agency updates and restructuring plans.

3. Review Your Financial Plan

Understand how your benefits can support you during transitions.

4. Seek Professional Advice

Experts can help you review your service records, understand your TSP and health options, and map out next steps.

Final Thoughts

Being a probationary employee during DoD layoffs is undoubtedly stressful. But it’s also a time to get proactive, understand your rights, and make informed decisions about your career.

Whether you’re wondering how to preserve your TSP, navigate FEHB options, or prepare for long-term financial stability, professional support can help.

At PWR Retirement Group, formerly known as PSR Assurance, we specialize in helping federal employees — even during uncertain transitions. Our team can guide you through changes that affect your employment and help align your financial strategy with your career goals.

Remember, your probationary status may be temporary — but your career and retirement goals are long-term. Take action now to protect your future.