Risks to US Cyber Diplomacy Amid State Department Shakeup

Planned workforce cuts and a reorganization of cyberspace operations at the U.S. Department of State are raising concerns that international coordination could falter even as cyber issues join the main stage of diplomacy.

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Current and recent former State Department staffers told Information Security Media Group the agency is preparing to implement layoffs and begin a reorganization despite a San Francisco federal district court order blocking across-the-board layoffs at federal agencies. Employees were given until June 13 to upload updated resumes to an internal system. Sources said managers were asked to review personnel records and verify employee information in anticipation of potential staffing changes.

“We can’t risk hitting the pause button on diplomatic coordination – especially not right now,” said a State staffer granted anonymity to discuss the workforce cuts. “The surge required to respond to retaliation alongside our partners can’t happen with fewer hands” (see: Israel-Iran Ceasefire Holding Despite Fears of Cyberattacks).

Secretary of State Marco Rubio announced in May plans to eliminate as many as 2,000 employees and restructure the Bureau of Cyberspace and Digital Policy.

Multiple sources said department leaders haven’t stopped preparing for the workforce cuts and appeared poised to proceed with the overhaul.

The high court published Friday a ruling narrowing the ability of judges to impose nationwide injunctions, but did not make a decision on an administration attempt to overturn the district court injunction. The White House in May petitioned to overturn the lower court, which is blocking layoffs across 19 agencies, including the State department. The administration withdrew its appeal for procedural reasons, continuing the legal battle at the federal appellate court level. The timeline for a final ruling uncertain.

Analysts say cuts and the Rubio reorganization would fracture the department’s ability to carry out its cyber diplomacy mission. State established the cyberspace bureau in April 2022 in the belief that issues such as international norms around nation-state hacking and cyberspace deterrence need a dedicated office. Cyber diplomacy has become central to countering adversaries such as China – but that all could be derailed by splitting the bureau into pieces spread across the department, said Annie Fixler, director of the Center on Cyber and Technology Innovation at the Foundation for Defense of Democracies.

State coordination with Cyber Command and other agencies during active operations and incident response, as well as American capacity to support allies and partners, would suffer, she said. The bureau, Fixler said, has only just developed the ability to “receive the baton” from Cyber Command after “hunt forward” operations the military conducts in allied countries to counter adversarial activity. Past locations of hunt forward operations include Ukraine.

“Even before the [workforce reductions], the bureau had been losing talent,” Fixler said. Further cuts “will likely further strip the unique talent that the cyber bureau needs.”

Rubio’s reorganization would break up the bureau by shifting its economic policy portfolio to one office and its cybersecurity functions to another. The change would also cut the bureau’s current direct reporting line to senior leadership.

The planned cuts come as tensions escalate in the Middle East, where analysts have warned of Iranian cyber retaliation against U.S. infrastructure following Operation Midnight Hammer (see: How US Cyber Ops May Have Assisted the Midnight Hammer Strike). The Trump administration has also diminished the size of cyber-focused units across agencies including the FBI and the Cybersecurity and Infrastructure Security Agency.

House Democrats urged their Republican counterparts during a recent House Committee on Foreign Affairs subcommittee hearing to block the restricting plan. “It undermines the core reason [Bureau of Cyberspace and Digital Policy] was created again – streamlining international cyber policy,” said Rep. Gabe Amo, D-R.I. “It is not efficient to create overlapping and redundant mandates. It is not efficient to jeopardize how CDP coordinates cyber policy with the Department of Defense, Homeland Security and the intelligence community.”

Even should the federal district injunction hold, the reorganization could still proceed. Rubio initiated the layoffs through a separate internal directive and has argued the department’s restructuring is independent of Trump’s broader workforce order blocked in district court.