Enterprise data agents answer business queries by chaining many tool calls over multiple reasoning steps, routinely accumulating hundreds of thousands of context tokens per session. Existing compression strategies typically allocate retention budgets without accounting for the downstream consequences of removing individual tool outputs. Aggressive compression may therefore trigger costly tool re-invocations that offset the initial savings. We call this the compression--consequence gap. To close it, we propose TRACER, which formulates compression as a sequential per-tool decision problem. A lightweight REINFORCE policy assigns query-conditioned retention ratios using only information available at each compression event. Its consequence-aware objective jointly accounts for task success, total token consumption, and post-compression tool re-invocations. To improve credit assignment, TRACER uses a learned outcome model to compare the predicted consequences of the selected retention ratio with those of fully retaining each tool output. On held-out production queries across three compressor backends, TRACER reduces total token consumption by 29--46% relative to keeping all context while maintaining comparable or higher task success. Compared with a tool-type-conditional static policy, TRACER provides an additional 15--18% of token savings. Interventional rollouts show that the learned per-tool credit scores correlate with measured single-tool consequences. The learned policy also yields positive savings when transferred across agent backbones and compressor architectures, and reduces token consumption by 18--25% on five held-out LOCA-bench environments. These results demonstrate the value of consequence-aware, per-tool context retention for improving the efficiency of long-horizon language agents.
As LLM agents tackle longer tasks, they increasingly compress growing histories of reasoning, actions, and tool outputs. Compression can reduce token use, but it also changes the information available for later decisions. Existing agentic harnesses bundle decisions about what to compress, when to compress, and how much to remove into fixed policies. A systematic characterization is needed to disentangle these decisions and reveal how each affects task success and execution cost. We systematically vary these decisions across three open-weight models on SWE-bench Verified and Terminal-Bench 1.0. Across nearly 35,000 agent runs, we measure task success, token use, end-to-end latency, and estimated cost. We find that fewer tokens need not mean faster or cheaper execution: on Terminal-Bench with Qwen, policies using roughly one-third as many tokens can take 20-80% longer than the uncompressed agent. Policies with similar overall success can solve different tasks, while the same policy can perform quite differently across models. Our results motivate evaluating compression by its effects on agent execution and tailoring policies to the task, model, and workload.
LLM agents accumulate interaction histories that grow linearly with task length, causing quadratic inference cost scaling and performance degradation from attention dilution. Existing context-compression methods learn what to discard offline: by contrastively optimizing guidelines, distilling compressors, or training compression policies. This incurs a substantial cost. Further, the compression policy is learned a priori and is not dynamically conditioned on the evolving test-time trajectories. In this paper we ask a complementary question: Which past interactions causally shape the agent's future decisions? We recast context compression as a causal decision preservation problem over discrete interaction units and introduce FOCUS, a training-free context compression framework that operates entirely at test time. Our method requires no offline data collection or fine-tuning, and is architecture-agnostic, attaching to any closed-API frontier model as a modular compression layer. We evaluate FOCUS on diverse agentic benchmarks including API and tool-calling, QA, web domain and multi-turn dialogue. Our method establishes new state of the art performance, cutting peak context by up to 48% and dependency by 73% while improving task success by up to 8.9 percentage points over uncompressed execution.
Long-horizon LLM agents accumulate reasoning traces, actions, and tool observations that can eventually exceed a model's fixed context window. Existing compaction methods address this limitation by discarding, summarizing, or retrieving earlier information, but they may remove task-critical details or fail to recover them reliably. We propose ARC (Addressable Recall Compaction), a context-management framework that separates archival storage from active-context presentation. ARC stores tool observations in an append-only, ID-addressable log and replaces older observations with compact citations when compaction is required. The agent can subsequently use these identifiers to request stored content without re-executing the corresponding tools or depending solely on similarity-based retrieval. We evaluate ARC using Qwen3-8B with a 16k context window and Qwen3-32B with a 32k context window. On the Needle-in-a-Haystack evaluation, ARC achieves an average exact-answer accuracy of 99.40%, compared with 88.12% for the best-performing baseline in our evaluation. ARC also reduces estimated serving time and HBM traffic under our hardware-cost model. On the LongBench-v2 Hard subset, ARC obtains an average accuracy of 29.97%, compared with 28.25% for the best-performing baseline. These results indicate that explicit, address-based recall can improve information retention and serving efficiency relative to the evaluated context-management baselines under the tested settings.
Thang Dang, Yuma Ichikawa, Sakina Fatima +1
Fujitsu Research of America · Fujitsu Limited Japan · RIKEN Center for AIP