HUD cuts workforce 29% and terminates $367 million in contracts

The Department of Housing and Urban Development reduced its workforce by 29 percent between December 2024 and December 2025 and terminated about 21 percent of its active contracts, valued at roughly $367 million. The agency also altered the mix of programs it funds in response to presidential directives and executive branch guidance.

More than half of the employees who left had at least 10 years of service, and 41 percent had served for over 20 years. HUD achieved most of the workforce reductions through deferred resignation programs and did not publish any reorganization notice for field office closures in 2025; in 2026 it announced a plan to consolidate one field office into a nearby regional office.

Of HUD's 68 active grant programs, about half made new awards in fiscal year 2025, with the median award value higher than in prior years. The terminated contracts primarily involved professional or information-technology services.

GAO interviews with 20 stakeholder organizations - including fair-housing grantees, public housing agencies and Section 8 project-based rental-assistance managers - reported confusion, delays and operational disruptions. Stakeholders said experienced points of contact had departed, leading to reduced services or staffing during month-long funding gaps and delays in physical inspections of HUD-assisted properties.

Since January 2025 HUD has reported initiatives to increase efficiency, such as a unified grants system and a project-voucher program to automate rental-assistance processing. HUD did not respond to GAO's requests for details, leaving Congress and the public with limited information on the status or effectiveness of those initiatives.