Elon Musk's mass layoffs and budget cuts may end up backfiring

The mass layoffs and budget cuts pushed by DOGE may end up triggering additional expenses that rival — or even exceed — the amount Musk credits himself with saving.

Doge's mass layoffs and budget cuts may end up triggering additional expenses that rival - or even exceed - the amount Musk credits himself with saving.

According to estimates from the nonprofit Partnership for Public Service, it will cost $135 billion to put tens of thousands of federal employees on paid leave, rehire those dismissed by mistake, and make up for the resulting drop in productivity.

Cuts to the IRS - where roughly 40% of the staff is set to be laid off - are projected to slash tax revenue by $2.4 trillion over the next decade.

Everyone turns on Musk

DOGE's sweeping powers quickly provoked backlash from the Trump-appointed heads of various departments and agencies.

In essence, Musk's staff - embedded across federal bodies - operated as political commissars, blocking certain decisions and asserting control over personnel and budget matters.

The first major standoff came in February, when Musk publicly demanded that all federal employees submit weekly reports detailing their work. The directive outraged leaders of law enforcement and intelligence agencies, many of whom advised their teams to ignore Musk's requests.

A few days later, the White House announced that filing such reports was strictly voluntary and that a refusal to submit them would not result in termination. From that point on, most departments stopped taking the directive seriously.

Some federal workers still sending the reports now reuse lightly edited templates each week, or else treat the requirement as a running joke - occasionally submitting their updates in foreign languages.

In March, during a cabinet meeting, Musk publicly accused Secretary of State Marco Rubio of not cutting enough staff. Rubio shot back that 1,500 people had already left of their own initiative - and suggested rehiring them just so Musk could fire them again for show.

Transportation Secretary Sean Duffy criticized the billionaire over his efforts to slash the number of air traffic controllers, especially amid news of several plane crashes. Veterans Affairs Secretary Doug Collins also voiced concern over mass layoffs in his agency, leading Trump to say that Musk would now act in an advisory role only, while agency heads would decide for themselves whether to reduce staff.

In another episode, Musk clashed with White House trade adviser Peter Navarro, who is considered to be one of the chief architects of the sweeping tariffs Trump announced in early April (before suspending them following a sharp market drop). First, Musk mocked Navarro for having a Harvard education. Navarro fired back saying Musk was only opposed to the tariffs because Tesla sources parts from China. The White House dismissed the clash as a "free exchange of ideas among members of the administration."

The most dramatic clash involved Treasury Secretary Scott Bessent. Musk had opposed Bessent's nomination from the start, lobbying instead for billionaire Howard Lutnick, who ultimately became Secretary of Commerce. In mid-April, while Bessent was on an overseas trip, Musk convinced Trump to appoint IRS staffer Gary Shapley as acting head of the department.

When Bessent returned to the U.S., he quickly removed Shapley from the post.