Elon Musk has a new job doing something he knows a great deal about: firing people. Lots of people. Now he’s about to test his axing skills on the greatest downsizing challenge in American history.
He is co-head of the Department of Government Efficiency (DOGE), recently formed by President-elect Donald Trump to cut back government regulations, dismiss unneeded workers, and save money. Musk’s partner is Vivek Ramaswamy, a former biotech entrepreneur and candidate for the 2024 Republican presidential nomination. Their ambition is staggering. In a recent Wall Street Journal op-ed, they write that they anticipate “mass head-count reductions across the federal bureaucracy,” which will be their primary tool for cutting costs. Ramaswamy has suggested firing 75% of federal employees.
Musk looks like the ideal man for the job. He has sacked significant numbers of workers at SpaceX and Tesla—he’s CEO of both—but for sheer exuberant terminating, nothing can match his performance at Twitter. When he bought the company in 2022 he began mass layoffs within a week, firing thousands of the company’s 8,000 workers overnight. Some got the news by email. Others could only infer they were dismissed when they couldn’t log into the internal computer system the next morning. A few were even fired by accident and were brought back. In following months he cashiered more. Six months after taking over, Musk told the BBC he had reduced the staff by more than 80%.
It’s hard to tell exactly how X (as Musk renamed Twitter) has fared, since the company is no longer publicly traded, but signs aren’t promising. Fidelity owns a minority share of X and reports its estimated value. Based on Fidelity’s October estimate, X has lost 79% of its value since Musk took over.
Will Musk bring the Twitter playbook to America’s biggest employer, the federal government? It’s easy to picture Washington trembling at the thought. But as other captains of industry have found, government is different from the private sector in some peculiar ways. Here’s what Musk is up against.
· DOGE can’t make it happen. Musk could fire employees of his companies in an eyeblink because he was CEO (and at Twitter, also majority owner). But DOGE “doesn’t have any power,” says Douglas Holtz-Eakin, former director of the Congressional Budget Office and now president of the center-right American Action Forum. “They’re an outside advisory group who are going to generate ideas. They are essentially a very high-profile think tank.”
· Dismissals depend on regulatory rollbacks. DOGE’s stated procedure is to identify federal regulations that appear to be invalid under two Supreme Court decisions, from 2022 and 2024. President Trump will then nullify “thousands of such regulations,” Musk and Ramaswamy say in their op-ed. Fewer regulations mean a lighter workload and fewer employees. But while Trump can “immediately pause the enforcement of those regulations,” they note, he must then “initiate the process of review and rescission,” which can take a year or more and may not happen at all. Many regulations have constituencies with a voice in what happens. Bottom line, some regulations don’t succumb easily.