Currently, only more than 20,000 employees, accounting for about 1% of the total number of federal government workers in the United States, have signed resignation agreements to accept the government's so-called deferred retirement "buyout plan," which offers approximately eight months of salary compensation.

Written by: Li Dan, Wall Street Insights

More than two years ago, after Musk acquired Twitter, he laid off over 4,000 people in just 20 days. This time, he is leading the "Department of Government Efficiency" (DOGE) with a more astonishing goal of reducing the federal workforce by hundreds of thousands within a few months. The latest news indicates that this goal may be difficult to achieve.

On Tuesday, February 4, Eastern Time, Bloomberg reported that Trump and Musk hope to potentially reduce federal government employees by up to 10%. However, currently, only more than 20,000 employees, about 1% of the total federal workforce, have signed resignation agreements to accept the recently offered deferred retirement "buyout plan."

Reports indicate that officials familiar with the relevant data have revealed that the number of people signing the aforementioned voluntary resignation agreements is increasing daily. The government expects that by the deadline for participation in the deferred retirement plan on February 6, this Thursday, the number of resignations will surge. Even so, achieving the aforementioned 10% layoff target is still very difficult. This is because the federal government has nearly 2.3 million civilian employees, and about half of them may not qualify for the deferred retirement plan, such as defense and intelligence-related employees, postal workers, law enforcement personnel, and certain sensitive positions.

The Trump administration launched the deferred retirement plan last week. According to CCTV, on January 28, local time, the U.S. government's Office of Personnel Management (OPM), which is responsible for human resources, sent an email to federal government employees indicating that the government would offer approximately eight months of salary compensation to all voluntarily resigning federal employees, but they must make their resignation decision by February 6. If they resign under this plan, their salary and benefits will continue until September 30, and there will be reductions in work arrangements during that period.

Musk later posted on social media X, explaining that employees who voluntarily resign under the aforementioned "buyout plan" can receive eight months of compensation, during which they can do anything they want, including looking for a new job. The OPM's official website published a list of frequently asked questions, explaining that during the eight months of receiving compensation, employees can take new jobs as long as they do not conflict with their current federal government work, and they cannot sue the government.

Wall Street Insights previously mentioned that the White House is asking federal government employees to choose between returning to the office full-time and resigning through the aforementioned "buyout plan." White House officials stated that mandating employees to return to the office would lead to 5%-10% of federal employees resigning, and they expect this policy could save up to $100 billion annually. However, some lawmakers have warned that Trump could change his mind at any time, and if employees resign under this buyout plan, they may not receive the promised funds in the future.

The union representing federal government employees is also skeptical of the "buyout plan," believing it does not guarantee employees will receive compensation. The National Treasury Employees Union (NTEU), which represents employees from 36 federal agencies and offices, believes this plan is designed to entice or intimidate employees into resigning. The largest union representing U.S. government employees, the American Federation of Government Employees (AFGE), believes the intent of the plan is to "turn the federal government into a toxic environment where employees cannot stay even if they want to."

Last week, CCTV mentioned that AFGE filed a lawsuit in federal court in Washington, D.C., last Wednesday to block Trump's plan to reclassify up to 50,000 federal workers, making it easier for them to be fired. The lawsuit claims that Trump does not have the authority to strip federal employees of protections against arbitrary dismissal without adopting formal rules.

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