Arizona Agency Cuts Staff Amid Controversial Contract Renewal

Phoenix, Arizona — The Arizona Department of Economic Security (DES) has reduced its workforce by 5% due to federal funding cuts, resulting in the loss of several key positions. This announcement came just days after DES renewed a $170,000 contract for an executive role, sparking criticism amidst the layoffs.

According to officials, 5% of the DES staff received termination notices last week as the agency faced budget constraints related to unemployment insurance grants. Mitch Zak, a spokesperson for the University of Arizona, noted that this situation has been exacerbated by a slowdown in the stop-order process for grants.

Despite the layoffs, DES decided to renew the contract for Dana Allmond, a senior executive consultant who assists veterans in accessing agency services. Allmond was appointed by Governor Katie Hobbs in 2023 but has not received Senate confirmation to her role due to past legal entanglements.

Christian Slater, a press aide for Governor Hobbs, defended the contract renewal, stating that Allmond’s work is crucial for supporting veterans. He emphasized that the agency is facing challenges that require ongoing assistance for those who served in the military.

This contract renewal has attracted scrutiny from state lawmakers, particularly Senator Jake Hoffman. He criticized the decision as a misuse of taxpayer money, suggesting that it reflects poorly on how the Governor manages state resources.

Amid the layoffs, DES Director Michael Wisehart mentioned that the agency is grappling with significant funding cuts. He emphasized the need to adjust staffing levels to meet these financial challenges, which he stated have persisted despite attempts to stabilize the workforce.

The financial pressures on DES extend beyond layoffs, with added costs shifting directly to the state budget due to new federal policies. As financial strains continue, the agency warns that the cuts could negatively impact vital services, including food assistance for Arizonans.

As the situation unfolds, concerns remain about the future of services provided by DES and the individuals who depend on them, as the agency navigates its ongoing financial challenges.