SD Labor Department to cut job services staff, close offices

SIOUX FALLS, S.D. – As Gov. Kristi Noem continues a $6.5 million advertising campaign to attract more workers to South Dakota, her Department of Labor and Regulation is cutting positions and closing offices across the state, according to an email obtained by South Dakota News Watch.

Labor Secretary Marcia Hultman sent an email to South Dakota Job Services offices Dec. 14 informing them of “22 reductions in force resulting in office closures and the elimination of positions.

"These reductions are the result of federal funds not increasing while the cost of doing business has grown. We have dealt with this in recent years by gradually reducing staff and utilizing carry-over funds. However, the inflationary impacts of the past year called for a more targeted effort resulting in today’s actions," Hultman wrote. "Those impacted have been notified in person, and I would like everyone to have the same facts." 

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The layoffs and closures taking effect Feb. 8, 2024, include:

• Job services positions in Brookings, Winner and Madison will be eliminated and the offices will be closed.
• Employment service assistant positions will be eliminated in Aberdeen, Mitchell, Spearfish and Vermillion.  
• Offices in Aberdeen, Mitchell, Pierre, Spearfish and Vermillion will be open by appointment only.
• Secretary positions will be eliminated in Rapid City and Watertown as well as one job services position in Lake Andes.

Text of the email

Lawmaker wants a meeting

Sen. Tim Reed, a Republican state legislator from Brookings and CEO of the community’s economic development corporation, told News Watch that he will request a meeting with Hultman to discuss the staff and office reductions.

Reed added that state lawmakers will likely have questions about the decision to reduce job service staff at a time of increased emphasis on finding workers in South Dakota, which has an unemployment rate of 2%.

“As a legislator, you look at (workforce efforts) as an investment,” said Reed. “Are we spending our money well to ensure that we are doing everything we can to get more workforce in the state? I think that needs to be looked at. How many boots on the ground do we need and how can they best be distributed?”

In a statement to News Watch, Hultman said legislators in the areas impacted were notified of the actions as were House and Senate leaders and the chairs and vice chairs of the Appropriations Committee. The committee will be briefed during the Department of Labor and Regulations budget hearing this coming legislative session, she said.

Timing of the cutbacks questioned

Job services offices provide assistance to those seeking employment and also help connect employers with workers through job fairs and workshops. Reed noted that the online presence of some of these services might have contributed to the cuts.

Democratic state Sen. Reynold Nesiba of Sioux Falls called the layoffs and closures “deeply unfortunate” and questioned the timing of the decision.

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“These closures happen just as Republican leaders are working to impose work requirements on those receiving Medicaid,” said Nesiba, a member of the Senate Commerce and Energy Committee and an economics professor at Augustana University.

“Intentional or not, it makes it look like South Dakota Republicans are doing all they can to deny voter-approved health care access to those who need and deserve it. Working to impose work requirements while simultaneously closing job service offices is unnecessarily cruel.”

Lawmaker says impact of closures may be limited

State Sen. Lee Schoenbeck, a Watertown Republican who also serves on Commerce and Energy, downplayed the impact that the closures will have on people finding employment.

“If you need the government’s help in finding a job, you'll drive by 30 'Help Wanted' signs on your way to the (job service) office,” he told News Watch via text message.

The reductions come as Noem continues her national advertising effort through the Governor’s Office of Economic Development, which used about $5 million from the Future Fund for the initial campaign.

Economic development corporations and some major employers were then solicited for contributions to pay for a $1.5 million “phase two” of advertisements that have hit the airwaves, with Noem playing the role of an accountant in the TV spots. She portrayed a plumber, electrician and dentist in earlier ads.

Laid off employees will be interviewed for other jobs

Hultman told News Watch that her top priority is to "help staff find employment within state government should that be their preference.

"We will be working diligently throughout this transition to prioritize continuity of service to our clients, partners, and communities," she said.

Hultman noted in her Dec. 14 email to Department of Labor staff that those losing their jobs “will be guaranteed an interview for state openings for which they apply and qualify.”

Department of Labor employees received an across-department raise of 13.6% for fiscal year 2024 as part of pay increases for state government employees passed by the Legislature last session.

“I have agonized over the right time to share this information,” Hultman wrote in the email. “However, I determined it was best to provide individuals with as much time as possible to plan.”