Shadows of Musk in the Government's Buyouts Plan

New York Times

29-01-2025

The 'Fork in the Road' subject line sent from an email on Tuesday to millions of federal employees may have been puzzling at first. The message from the Office of Personnel Management was essentially a pink-slip notice: It offered a choice of returning to the office full-time, accepting a buyout offer or risk being furloughed or, eventually, fired. (It shared a subject line with an email that Elon Musk used to force widespread resignations at Twitter in 2022.)
There's tons of confusion about how the buyout package, which offers employees eight months of pay, will work. We have a full rundown below of what's quickly becoming a consequential workplace story — but what do you think about the 'dignity' of buyout packages. How many months of pay is fair?
The hand of Elon Musk
President Trump has long railed about Washington bureaucracy, campaigning to 'dismantle the deep state.' That became a central plank of Project 2025, the Heritage Foundation-led conservative policy paper that has become a blueprint for a second Trump term — and was a major priority for Elon Musk, one of Trump's top allies.
Now the Trump administration is offering payouts to millions of federal employees to resign, seemingly amid a 'flood the zone' strategy of disrupting the government status quo. And there are signs that Musk, now Trump's cost-cutter in chief, has had a big hand in how this is playing out.
The TL;DR: The Office of Personnel Management, which oversees the federal civilian work force, on Tuesday emailed government workers with an offer. Respond with 'resign' by Feb. 6, and get full pay through the end of September. Or, risk being furloughed or being made easier to fire.
Musk's America PAC calculates that if up to 10 percent of federal workers were to resign, the government would save around $100 billion. But the email also laid out a vision for a Silicon Valley-sounding 'performance culture' across the federal work force — prioritizing 'reliable, loyal, trustworthy' workers.
The email bore a strong resemblance to what Musk did at Twitter in 2022, down to the 'Fork in the Road' subject line. For good measure, Musk on Tuesday reshared a picture of a giant fork-in-the-ground sculpture that he had originally commissioned for the Burning Man festival.
Musk is focusing a lot of attention on the O.P.M., as he promises 'mass head-count reductions across the federal bureaucracy,' according to The Times's Theodore Schleifer and Madeleine Ngo. He has sought to install allies there, including Scott Kupor, a managing partner at Andreessen Horowitz, whom Trump has named to lead the agency (and who awaits Senate confirmation), and Anthony Armstrong, a former Morgan Stanley banker who helped lead Musk's Twitter takeover.
Opposition to the mass buyout offer quickly emerged. Senator Tim Kaine, Democrat of Virginia, a state with a big number of federal employees, told The Wall Street Journal that the president did not have the authority to execute the 'deferred resignation' orders.
And some federal employees reportedly fear that what happened in the Twitter buyouts — including unanticipated catches in the terms or delays in the payouts — could happen here. Government unions have condemned the offer.
(One thing worth remembering: Musk later said some Twitter employees who were let go 'probably shouldn't have been,' and scrambled to rehire some.)
Expect another fight between the administration and its opponents. It would come after a federal judge in Washington temporarily blocked the president's order to freeze trillions of dollars in federal grants and loans that disrupted government programs, including Medicaid.
Starbucks's turnaround plan shows strains. The coffee chain reported an annual drop in sales on Tuesday, and its C.E.O., Brian Niccol, said that his goal of getting customers their orders within four minutes was falling short. 'We're on track to turn the business around,' he added, but warned that the current quarter could be challenging.
Howard Lutnick faces the Senate on Wednesday. President Trump's pick for commerce secretary is set to testify before the Senate Commerce, Science, and Transportation Committee, and is expected to face questions about his business ties to Greenland and his enthusiastic support for tariffs.
The tech stock rebound continues. Shares in ASML, a Dutch semiconductor equipment maker that's a bellwether for the A.I. sector, zoomed higher this morning after reporting blowout earnings and an upbeat sales outlook. But a test for investors comes later on Wednesday, with Jay Powell, the Fed chair, set to talk about the state of the economy and the outlook for interest rates.
How real are DeepSeek's advancements?
The tech world is still reckoning with DeepSeek, the Chinese start-up that has shattered the common wisdom for how the artificial intelligence business is supposed to work. (The latest group to debate the DeepSeek effect: venture capitalists who have sunk billions into A.I. start-ups.)
Many have marveled at — or worried about — how DeepSeek managed to achieve technological advancements with far fewer resources than Silicon Valley counterparts. But some skeptics increasingly believe that the company ripped off the hard, expensive work of American rivals.
OpenAI and others think that DeepSeek was trained on its models. The process is called 'distillation,' and essentially involves having a smaller A.I. model learn from the output of a larger one to optimize functionality.
Bloomberg reported that Microsoft — OpenAI's biggest investor and cloud computing partner — observed accounts believed to be tied to DeepSeek taking huge amounts of data from OpenAI's programming interface in the fall. OpenAI told The Financial Times that it had seen some evidence of this, though it didn't elaborate.
Does it matter? Tech experts say that distillation is a common practice in the A.I. world, especially by smaller players, though it violates OpenAI's terms of service. But it does illustrate how hard it is to defend technological leads in A.I.
That said, some tech executives responded to posts by Andrew on social media about distilling, comparing the practice to A.I. companies training their models on copyrighted content. (Disclaimer: The Times has sued OpenAI and Microsoft, accusing them of copyright infringement.)
'The vast majority of LLM insights and breakthroughs are 'borrowed'. A community of glass houses,' Bill Gurley, the venture capitalist, wrote on X.
It's tech earnings day. We have questions.
Some of Wall Street's biggest names will report quarterly results after the bell, but the company everyone wants to talk about is DeepSeek. The scrappy Chinese start-up upended widespread assumptions about the economics of artificial intelligence, including the value of the billions its U.S. competitors spent to develop the technology.
Here's what DealBook and Times reporters are thinking about before the results.
The Times's Mike Isaac, who covers Meta, wonders:
On Microsoft, DealBook wants to know:
The Times's Neal Boudette, who writes about Tesla, asks:
What C.E.O.s have said about Kennedy
Business leaders have largely tolerated President Trump's cabinet picks. But as confirmation hearings start on Wednesday for Robert F. Kennedy Jr., his choice for health secretary, some of the nation's largest companies will most likely be rooting against Kennedy.
Kennedy could make life harder for agriculture, food and pharmaceutical companies. He has attacked genetically modified food, certain pesticides, corn syrup and, perhaps most notably, vaccines. And he has promised to shake up the Food and Drug Administration, which approves new drugs, and the National Institutes of Health, a big funder of biomedical research.
Even Caroline Kennedy, his cousin, urged senators on Tuesday to reject his nomination, calling him 'a predator' in a rare letter publicly rebuking a member of her own family.
Executives like Albert Bourla of Pfizer have played down Kennedy's potential effect, and said they would work with him if he was confirmed. But other industry figures have publicly criticized Kennedy's nomination:
Could concerns by businesses stymie Kennedy's confirmation? The prospect of more regulations may be hard for some Republicans to accept, especially those that could increase the price of groceries.
There are also powerful interest groups at play. 'I may have to spend a lot of time educating him about agriculture,' Senator Chuck Grassley, Republican of Iowa, a state that has been a huge beneficiary of agriculture subsidies, has said of Kennedy.
A wild card worth watching: While Kennedy has been a sharp critic of the agriculture and pharmaceutical industries, he has also sought to reassure Senate Republicans in recent weeks about his positions.
He has demonstrated a 'willingness to set aside even his most outspoken stances in the service of the Trump alliance and his own political future,' The Times's Rebecca Davis O'Brien, who covered Kennedy's presidential campaign, told DealBook.
'Some might call it opportunism; some might call it political savvy,' she added.
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