Back in 2011 the U.S. Army was told to reduce its strength by over 40,000. Since then that has been raised to 80,000. These cuts must be made by 2018 and it means that even some senior NCOs (E-7-E-9, three top enlisted ranks) will be forced into retirement. Some may find a place in the reserves, but with this move the army is now losing men and women who took several million dollars each and over two decades to turn into very effective troop leaders and administrators.
Reducing army strength from 570,000 to 490,000 is called a RIF (Reduction In Force) in the military. If given enough time to do it you can avoid losing senior NCOs by cutting the number of new recruits taken each year and slowing down promotions. But when you have to do it fast you are going to lose some people you would rather not lose. The army will probably lose several thousand senior NCOs due to early (involuntary) retirement. This is a layoff and the army hoped to avoid this. By offering early retirements, buyouts, and increased retention (being able to renew your contract) standards, the army hoped to avoid just summarily firing people. But with so few soldiers leaving, the army had to decide who to force out. This was particularly crucial with NCOs (Non-Commissioned Officers, or sergeants), who are 21 percent of the troops and a key component of the most effective armed forces.
The most important opportunity during these situations is to select and keep your best people, while you get rid of less capable troops. This is especially important with your career officers and NCOs. But it's bad for morale when you start cutting people loose before they have put in their twenty years (and qualified for a pension). That's where the buyout (partial payment for the lost pension benefit) comes in. The biggest problem is deciding who is worthy of staying. This has always been a tricky process, and past efforts have tended to come up short. This time around the personnel bureaucrats think they can do a better job. Time will tell.
Back in 2011 the army began screening most of its NCOs (ranks E-6 to E-9), and discharged (honorably) those with the lowest evaluations or who were in overstaffed job categories and refused to retrain. This technique had been around for over a decade as the Qualitative Management Program (QMP), but was suspended when Iraq was invaded in 2003 and it became clear that the army would need every NCO it could get. With the Iraq war over and the army being downsized the QMP is back. Now there is also QSP (Qualitative Service Program) which decides which senior NCOs should be forced to retire because their job category is overstaffed. The solution to this used to be retraining in another area, but that does not work in a major RIF because with such wide cuts there are few, if any, other career fields in need of additional senior NCOs.
Actually, QMP was revived, in a small way, in 2010 when the army reviewed 19,000 of their senior NCOs, and forced 33 to retire. It's believed that, because so many NCOs have been in combat in the last decade, and under a lot of stress, the ones who were not up to the job had already left and questionable sergeants still in service were cut some slack. The army expected more of this program, and estimated that at least 400 NCOs would get the ax. Despite the fact that many of these NCOs are eligible for retirement (they have served at least twenty years), more than that had to be cut. The new evaluations sought to pick those the army could most afford to lose.
In 2013 QMP/QSP found 160 active duty and reserve senior NCOs who were forced to retire and that’s expected to be over 500 in 2014. Officers are also going through this process and 2,000 are being cut this year. Many of these officers are not eligible for retirement and will receive separation pay. Those within a few years of retirement will be allowed to stay in until they hit twenty years.
For lower ranking troops the army is raising recruiting standards and forcing the less capable troops to leave the service. This is done by reducing the number of years a soldier can remain in the service if they have not been promoted. For example, troops with an E-4 rank (enlisted ranks are E-1 to E-9) must leave if they are not promoted again eight years after attaining E-4. New recruits have five years to make it to E-4. A sergeant (E-5) must get promoted before they reach 14 years. If a soldier gets to E-6 they can stay 20 years and get a pension. Only soldiers who get to E-9 (Sergeant Major) will be allowed to serve 30 years and retire with 75 percent of active duty pay.