Musk’s Plan to Slash Bureaucracy Faces Backlash as Markets React

By McKenzie Huitsing

The Department of Government Efficiency (DOGE), led by Elon Musk, has enacted major workforce cuts across multiple federal agencies, including HHS, DHS, USAID, VA, NOAA, USFS, NPS, the Department of Education, FAA, and the IRS. These measures are designed to improve operational efficiency and lower expenses.

Musk views DOGE as more than just a government efficiency effort. On The Joe Rogan Experience (Feb. 28, 2025), Musk stated, “Normally, the bureaucracy eats revolutions for breakfast. This is the first time that they’re not.” He believes these reforms could shift power away from entrenched institutions and back to the people.

Concerns among stakeholders have grown due to unclear plans for maintaining or replacing essential services previously provided by affected employees.

One notable initiative is DOGE’s development of an AI proprietary chatbot called GSAi, which is intended to automate certain government tasks. This AI chatbot is being tested to streamline operations and cut costs, but its ability to replace complex human roles is still uncertain.

Critics warn public services may suffer, affecting those who rely on them. The administration has not explained how it will balance cuts with essential functions. The market’s response to DOGE’s workforce reductions has been significantly negative. In February, planned layoffs surged to their highest monthly total since mid-2020 driven partly by DOGE’s actions. The S&P 500 and Tesla shares experienced notable declines, reflecting investor concerns over the economic implications of these cuts.

Additionally, corporate executives across various industries are increasingly concerned about unstable federal funding due to DOGE’s cuts. Many fear unpredictable budgets could disrupt existing federal contracts and deter future investment. Local governments are also feeling the pressure, with Nashville officials warning that key programs, such as homeless services and public schools, could lose millions in federal funding if proposed budget cuts move forward

DOGE aims to cut bureaucracy and streamline government, but with no clear plan to address the gaps left by mass layoffs and rising market concerns, the long-term impact on public services and economic stability remains uncertain.