"I want to thank him because we're trying to cut down our payroll … I'm very thankful that he let go of a large number of people because now we have a smaller payroll," Trump told reporters Thursday at his New Jersey golf club.
It is not clear how the Russian president kicking out U.S. diplomats would remove them from the U.S. payroll.
White House press secretary Sarah Huckabee Sanders on Friday said Trump "was being sarcastic" when he made the remark. When asked about it later Friday, Trump agreed with his spokeswoman's take.
After Congress passed a new Russia sanctions package, Putin said the U.S. would have to reduce its diplomatic mission there by 755 people. Trump later signed the bill, but said he had "problems" with it.
Members of Trump's administration, who had sought better relations with Russia, called the developments another setback. Secretary of State Rex Tillerson said relations with Moscow were under "considerable stress."