Since January 2023, Elon Musk's administration has terminated 1,125 federal contracts as part of a cost-cutting initiative. However, nearly 40% of these cuts have not resulted in actual savings.
Ineffective Contract Terminations
Despite attempts to cut costs, the administration terminated 417 contracts that were already fully paid, totaling $478 million. These actions achieved no real savings. Charles Tiefer, a former professor of government contracting law, likens these efforts to confiscating used ammunition, rendering them fruitless.
Job Cuts: Federal Agencies Hit Hard
Elon Musk's firm also carried out mass layoffs across several federal agencies. The Department of Veterans Affairs alone lost over 1,000 employees, impacting research and medical programs. The Pentagon laid off 5,400 workers, except for military personnel, who were exempt from cuts. The Education Department saw 39 employees fired, and $900 million slashed from the educational services budget, leaving the future of institutions uncertain.
Impact on Emergency and Health Services
The Departments of Energy and Health and Human Services also faced mass layoffs. Hundreds of nuclear program specialists were partially reinstated after internal backlash. The Department of Health and Human Services saw more than 5,000 job cuts, including 700 at the CDC. These measures have raised concerns about the agencies' ability to fully function with a reduced workforce.
The cuts in contracts and mass layoffs as part of Elon Musk's cost-cutting campaign have received mixed reviews. Although the claimed savings exceed $7 billion, independent analysts question the effectiveness of these measures, which in some cases have led to the loss of essential services.
