San Antonio federal layoffs test economic stability and workforce readiness

November 2025 — A recent wave of layoffs tied to expiring federal contracts is deepening economic uncertainty across San Antonio, with nearly 1,300 job losses statewide anticipated before the end of 2025. In one of the most significant local examples, 279 janitorial and maintenance workers at Brooke Army Medical Center (BAMC) will be laid off after Thanksgiving, following the end of a five-year, $148.8 million contract with CBRE Government & Defense Services.

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CBRE, formerly J&J Maintenance, has operated at BAMC since 2001. While some affected employees may be rehired by the next service provider, the layoffs are expected to be permanent and come with the loss of tenure and benefits, according to the company’s Worker Adjustment and Retraining Notification (WARN) letter submitted to the Texas Workforce Commission.

“These layoffs are expected to be permanent,” wrote Howard Young, the company’s chief people officer, in the letter. “However, there may be an opportunity for the impacted employees to be hired by the new service provider.” Some of the affected workers are represented by the Laborers’ International Union of North America.

These job losses follow earlier cuts by TechWerks, which laid off 87 workers providing IT services to the Defense Health Agency in San Antonio. Combined with layoffs at federal contractors across Texas — including NASA subcontractors, Spirit Airlines, and Texas Instruments — the current cycle reflects a broader shift in federal spending priorities and its cascading effects on regional economies.

Despite recent layoffs, the Dallas Federal Reserve forecasts that Texas will add roughly 180,400 jobs in 2025, a 1.3% increase by year’s end. While employment rose at an annualized rate of 3.2% in August, year-to-date growth remains modest at 1.2%, well below the state’s historical 2% trend. Economists caution that seasonal factors, including school-year hiring, may be inflating recent gains.

Beneath the surface, key sectors are showing signs of strain. In September, the Dallas Fed’s Service Sector Outlook Survey recorded a sharp decline in business conditions, with the employment index falling into negative territory and hours worked contracting. Uncertainty also surged to 22.5, its highest reading since April, reflecting increased caution among employers. Retailers reported even deeper weakness, with sales, staffing levels, and overall business activity all declining. These figures suggest that while headline growth continues, San Antonio’s labor market — particularly in service and consumer-facing sectors — is cooling.

This sentiment is echoed by the National Federation of Independent Business (NFIB), whose Small Business Optimism Index fell to 98.8 in September — the first decline in three months. The Uncertainty Index climbed to 100, one of the highest levels in the NFIB’s 52-year history.

The layoffs come amid broader workforce shifts in San Antonio, where local institutions are expanding support services to manage economic displacement. Workforce Solutions Alamo, the region’s publicly funded workforce agency, continues to offer job search assistance, career training programs, and industry-aligned certifications through its “Ready to Work” initiative and federally supported programs under the Texas Workforce Commission. According to agency data, in-demand fields include health care, manufacturing, and information technology — sectors still experiencing growth despite localized contractions.

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