Report: Hampton Roads lost about 6,300 federal civilian jobs in 2025

Hampton Roads lost more than 6,000 federal civilian jobs in 2025, a 10.5% drop that outpaces the national decline, according to a regional economist with the Hampton Roads Planning District Commission.

The data was part of a 2026 economic outlook report that Nikki Johnson presented to the HRPDC last week. The report dived into challenges facing the region’s economy, many of which were attributed to federal layoffs and tariffs.

“We’ve faced some significant policy changes at the federal level and a lot of economic uncertainty, and yet the national economy has remained remarkably resilient,” said Johnson, who previously served as a research associate at Old Dominion University’s Dragas Center for Economic Analysis and Policy. “But as you’ll see today, that is less true for Hampton Roads, where federal cuts have really had an outsized impact on our regional economy.”

A decline in jobs

She noted that Hampton Roads is home to the third-largest federal civilian workforce in the country. Yet the region’s federal civilian workforce dropped by more than 6,300 from 60,813 employees in December 2024 to 54,456 in November 2025 — a 10.5% drop. That’s higher than the national average of 9.2%, but lower than the state’s overall drop of nearly 12%, which also includes Northern Virginia, another region dominated by federal workers.

The region had 817,000 civilian jobs as of November 2025, a roughly 10,000-job decline since last January. Johnson noted that there are more people employed now than before the 2020 pandemic, but it still represents a significant decline; the region’s civilian jobs dropped 1.1% from January 2025 through November, while nationally jobs increased by 0.5% in the same period.

Since November 2024, the region also lost about 3,800 manufacturing jobs. On the flipside, private education and health services saw employment increase by 3,000.

Johnson added that layoffs have remained flat over the past decade, with the exception of the initial pandemic shutdown, but the hiring rate in Hampton Roads is the lowest it has ever been in 10 years. Population growth has slowed, partly due to stricter immigration policies under the Trump administration.

According to Johnson, there isn’t regional data for how the federal job cuts impacted minorities, but nationally, the Black unemployment rate has risen much faster than unemployment among white people, she said.

“We tend to see that already in economic slowdowns,” Johnson said. “But it’s also important to remember that Black people were overrepresented in the federal workforce. That was a meaningful employment for them, so with the federal cuts, that has really exacerbated that overall.”

Other economic challenges

The Port of Virginia also faced “significant headwinds” in 2025 related to tariffs, although overall, their impact regionally has been fairly muted. According to Johnson’s report, 20-foot equivalent units (TEUS) through November 2025 were at their lowest levels since 2019. Also, there were slowdowns in both imports and exports, and Johnson attributed some of the loss to China’s decreased soybean purchases in response to Trump’s tariffs.

Local tourism has also softened and is likely to remain a problem if trade conditions and travel demand do not improve, she said. Hampton Roads generated $235 million in hotel revenues through the third quarter f 2025 — a drop from $245 million a year prior.

However, while tariffs have been “big on paper,” their impact in overall regional data been somewhat muted due to a couple of factors.

“First, there’s some early research that shows that the statutory rate of tariffs is much higher than the effective rate,” Johnson said. “So a lot of the goods that businesses are importing over are being exempted from the tariffs. Second, we are seeing that businesses are largely eating the cost of the tariffs instead of passing them on to consumers in order to remain competitive on prices.

“And then finally, we do think that the full impact of tariffs are likely to be delayed. It will just take some time for tariffs to fully work their way through to prices, and that does mean that we’re likely to see an uptick in inflation in 2026, but there is a lot of uncertainty just given the stop-start nature of a lot of these tariffs.”

On the world stage, President Donald Trump’s aim to acquire Greenland and threats to enact higher tariffs on European allies until the U.S. takes control of the nation has caused economic volatility, although the dollar edged up from three-week lows Wednesday following his speech at Davos.

Johnson said that on the positive side in Hampton Roads, spending has remained “a key stabilizing force.” The region reported $2.6 billion in retail sales through November 2025, slightly below 2024 levels but above 2023 and the height of the pandemic. In addition, military pay increases and shipbuilding investments are expected to support regional output and household income. The region’s defense spending has steadily increased over the past four years, reaching $16.9 billion in fiscal 2025.

She noted that the $900 billion National Defense Authorization Act for 2026 includes pay increases for military service members and investments in shipbuilding.

“We think both of those will be a much-needed boost to our regional economy moving forward,” Johnson said.

While defense spending will likely be an “anchor” for the region in 2026, Johnson noted there is still significant downside risk, with slowing port activity and tourism and the potential for further decreased population growth. She said it’s unknown how long federal cuts will persist into 2026.

“It’s also important to remember that the federal civilian workforce, how many of those workers who quit or lost their job are able to find a new job in the private sector here in the region, or do they have to leave altogether?” she said. “That can constrain population and labor market conditions here in the region.”