When Elon Musk purchased Twitter in 2022, he laid off hundreds of staff, stopped paying lease and auctioned off espresso makers and workplace chairs in hopes of a giant turnaround.
Now the world’s richest man has introduced the identical slash-and-burn technique to the federal authorities, and a few individuals who skilled Musk’s takeover at Twitter have a warning: Anticipate chaos, cuts pushed by ideology as a lot as by price considerations, intimidation and loads of lawsuits.
Since assuming management of the Division of Authorities Effectivity, Musk has consolidated management over massive swaths of the federal government with President Donald Trump ’s blessing, sidelined profession officers, gained entry to delicate databases and invited a constitutional conflict over the bounds of presidential authority.
Emily Horne, who was head of Twitter’s coverage communications earlier than becoming a member of the Biden administration, describes Musk’s modus operandi as: “Take it over, ruthlessly purge anyone who he sees as opposition and crash operations to remake it in his worldview.”
It’s unclear whether or not his push for “extremely hardcore” modifications at Twitter has paid off. Income on the firm now known as X has plunged, the variety of customers has dwindled and even Musk himself has expressed frustration at how lengthy it’s taking to show across the firm’s funds.
“It isn’t working,” mentioned Ross Gerber, a minority stockholder at X who has written down his stake to zero and expects Musk to fail in Washington, too. “The federal government is going to eat him up and spit him out.”
By some measures, X remains to be a hit. The platform continues to draw lots of of hundreds of thousands of customers worldwide and has cemented Musk’s political affect. However precisely how it’s faring financially is tough to say as a result of the corporate is non-public.
The identical week that Musk’s groups at DOGE had been threatening to put off tens of hundreds of federal staff, bankers who loaned him billions of {dollars} to purchase Twitter had been bracing for losses and making an attempt to unload the loans on others. Musk has apparently given up hope of attracting key advertisers again to the platform and has sued a few of them.
Examples of budget-minded enterprise leaders who introduced their abilities to authorities work abound, however Musk made clear — at each Twitter and DOGE — that his priorities transcend effectivity into rooting out a “woke” agenda.
Lengthy earlier than combating variety, fairness and inclusion efforts grew to become a centerpiece of Trump’s third presidential marketing campaign, Musk eradicated Twitter’s DEI initiatives and the folks administering them.
“The culture of Twitter died,” mentioned former worker Theodora Skeadas, whose job was reduce within the weeks after Musk purchased Twitter for $44 billion in October 2022. “For a lot of these agencies and organizations, that may be in their future.”
One other tactic that Musk seems to be bringing to the federal government: “performances of loyalty.”
That’s how former Twitter govt Rumman Chowdhury describes Musk’s drive to make staff show the worth of their work in a method she says demonstrated fealty. As an example, engineers had been advised to print out code then line as much as have an inexperienced engineer consider it.
“It’s a fear and intimidation tactic,” Chowdhury mentioned. “I don’t know if it’s the best leadership style long term, as demonstrated by how abysmal Twitter/X is doing.”
Musk later sought to rehire a few of the engineers he fired. His intuition to threaten additionally backfired with advertisers.
Inside months of Musk’s takeover, promoting income plunged by half as manufacturers fled X over fears he was loosening content material moderation an excessive amount of. However as an alternative of courting the businesses, Musk took to X threatening to “thermonuclear name & shame” them for leaving his platform. Later at a convention, he used an expletive and urged them, “Don’t advertise.”
“Talk about shooting yourself in the foot,” mentioned advert guide Tom Hespos of Abydos Media, who advised his shoppers at that time to keep away from even posting on X as a result of it may harm their model. “That is probably the worst comment he could have made.”
In August, Musk doubled down by suing Unilever, Mars, CVS Well being and several other different firms that had dropped Twitter, accusing them of participating in an “illegal boycott.” On Saturday, he added extra firms to the lawsuit, together with Lego, Shell Worldwide, Tyson Meals, Nestle and Colgate-Palmolive.
His drawn-out authorized battles with greater than 2,000 former Twitter staff are additionally an indication of the sort of court docket fights that would await the federal government. A federal decide on Thursday placed on maintain a midnight deadline the identical day for presidency staff to simply accept Musk’s “deferred resignation offer” promising pay via September with out having to work.
Greater than two years later, Musk’s X remains to be “spending an insane amount of money” defending in opposition to allegations by former Twitter staff that they’re owed cash, mentioned lawyer Shannon Liss-Riordan, who represents lots of of the employees. She mentioned it could have been cheaper simply to pay them what they had been owed.
“If that is the way decision making is being made for the federal government, I’m very concerned about the finances of the federal government,” she mentioned.
Neither X nor DOGE responded to requests for remark from The Related Press.
Together with gutting the corporate’s workforce and auctioning off memorabilia and workplace furnishings, Musk’s excessive cost-cutting technique at Twitter included merely not paying its payments. Landlords of the social media firm’s headquarters in San Francisco in addition to its British workplaces took the corporate to court docket for hundreds of thousands of {dollars} in unpaid lease.
The British case settled for an undisclosed sum. The San Francisco case was dismissed final 12 months; it’s not clear if a settlement was paid.
Musk has additionally introduced one among X’s actual property executives over to the federal government.
Even when the X cuts had been an unmitigated success, it’s unclear whether or not the identical ways would work for reducing prices and nonetheless delivering companies at authorities companies.
Nicholas Bagley, a regulation professor on the College of Michigan, mentioned Musk and Trump are arrogating spending energy that belongs to Congress, not the manager department, and he predicts lawsuits over the strikes will hamstring their efforts.
“All this is of dubious legality, and that’s before you get to the civil service protections,” Bagley mentioned, referring to federal workforce guidelines stopping layoffs for political functions. “You’re going to see a lot of bombast and rhetoric, but I suspect it’s going to yield fewer things on the ground.”
A couple of in Musk’s orbit have tried to warn him in opposition to shifting too rashly, together with outstanding tech investor Paul Graham, who in a current X change requested Musk to “take your time and do it carefully.”
The federal government “isn’t just a company. Companies are born and die within the system, and it’s OK. But this is the system itself we’re talking about here.”
Minority X inventory proprietor Gerber, CEO of funding agency Gerber Kawasaki, praises Musk for instilling a way of belonging to the “special forces of business” at his firms. However he thinks Musk will fail in Washington.
“The idea that you can fire all these people doesn’t work,” he mentioned. “We’re about to see an epic battle.”