Trump administration plans large-scale layoffs as Elon Musk pushes $1 trillion budget cut

1. Trump administration plans large-scale layoffs as Elon Musk pushes $1 trillion budget cut

Trump administration plans large-scale layoffs as Elon Musk pushes $1 trillion budget cut ByHT News Desk Feb 27, 2025 12:25 AM IST Share Via Copy Link US President Donald Trump said that health and retirement benefits, which make up nearly half of the budget, would remain untouched.

The US administration, led by President Donald Trump, has begun preparing for large-scale layoffs as part of a broader effort to reduce government spending.

Leader of the Department of Government Efficiency Elon Musk wears a shirt that says "Tech Support" as he speaks during the first cabinet meeting of US President Donald Trump's second term in the Cabinet Room at the White House in Washington, DC, on February 26.(AFP)

At the first cabinet meeting, downsizing chief Elon Musk announced plans to cut $1 trillion from the $6.7 trillion budget this year, a move that could impact government programmes.

Donald Trump reaffirmed that health and retirement benefits, which make up nearly half of the budget, would remain untouched.

“We're not going to touch it,” said Trump, whose sweeping government overhaul has already led to over 20,000 job cuts, a freeze on foreign aid, and disruptions to construction projects and scientific research.

“If this continues, the country will go de facto bankrupt,” Musk said at the cabinet meeting, where he wore a black "Make America Great Again" baseball cap and a t-shirt that read “tech support.”

Trump is also urging Congress to extend the 2017 tax cuts, his key legislative achievement from his first term, which are set to expire at the end of this year. The nonpartisan Committee for a Responsible Federal Budget estimates that these cuts added $2.5 trillion to the national debt, now at $36 trillion, and that the proposed extensions could exceed $5 trillion over the next decade.

The layoffs so far have primarily affected probationary workers without full employment protections. The Trump administration is now planning deeper cuts that will impact career employees.

A memo released before the cabinet meeting called for a "significant reduction" in the workforce but did not specify the number of layoffs. So far, 100,000 of the country's 2.3 million civilian federal workers have either accepted a buyout or been dismissed.

According to the memo signed by White House budget director Russell Vought and acting Office of Personnel Management head Charles Ezell, agencies must submit their plans by March 13, a day before the current government funding is set to expire.