Retaining the Knowledge of Exiting Talent

I was speaking the other day with the head of learning and development  at a government agency. They have a scientific focus, but because of the current cutbacks, are having to let go of many staff.

A key challenge they are facing is to not lose the know-how of those people that have been fulfilling key roles. This can be a sensitive issue, because some of the people quite naturally feel that if the agency needs their knowledge, how comes they are letting them go?

Any thoughts?