The federal government’s human resources department will lay off 356 employees because of budget constraints and a slowdown in federal hiring that has left the agency with less work in certain areas, according to officials.

The Office of Personnel Management said it needs to halve its Human Resources Solutions staff, in part because the agency is terminating that department’s Nationwide Testing Program, which helps screen job candidates for other government entities.

In a statement on Thursday, the OPM said that “demand for proctored paper-and-pencil testing has been significantly reduced.” The agency added that it plans to increase the use of its online assessment platform, known as USA Hire.

Of the jobs the OPM plans to eliminate, 275 are intermittent and 81 are full-time. Another 28 vacant positions will also be cut. The federal government hires intermittent employees to perform duties on an as-needed basis, meaning their schedules are sporadic and unpredictable. Workers’ eligibility for federal benefits depends on whether they are considered temporary- or permanent-intermittent employees.

The layoffs, which largely affect training and testing staff, will trim payroll costs by about $12.2 million over the next two years, providing “improved capacity and organizational effectiveness by eliminating business lines that are no longer viable, and by realigning and consolidating certain financial units in support of the changing business climate,” the OPM said.

The reduction is set to take effect on March 28, and the OPM has alerted chief human capital officers across the government that a new pool of veteran federal workers will be available for new job openings as a result of the departures.

“It’s disheartening and sad,” said Charletta McNeill, president of the American Federation of Government Employees Local 32, which represents many of the affected workers. “When you receive a [layoff notice], it’s a game-changer. We had a lot of employees questioning what’s next.”

Last fall, the OPM and AFGE provided training to help workers prepare for a “soft landing” after the pending layoffs, which have been in the works since last year. Participants learned about other federal positions they might qualify for and potential advantages for landing those jobs, such as veterans’ preference, length of service and positive performance reviews.

The OPM’s 2014 budget request called for a $2.2 million reduction in salaries and expenses. Last year, the agency offered buyouts for 300 employees across 14 divisions. It did not provide information on Thursday about the number of workers who departed as a result.

The federal workforce, including the U.S. Postal Service, shrank by 80,000 employees last year, and the government is projected to shed 314,000 additional workers by 2022, according to data from the Bureau of Labor Statistics. Agency layoffs are highly unusual, and the recent decline is largely because of attrition and buyouts.

AFGE said the government-wide spending cuts known as sequestration played a significant role in the staff cuts planned for March.

“Federal agencies cut their training budgets, so it was a domino effect,” McNeill said. “Training budgets are the first to be cut any time there’s a budget reduction.”