Elon Musk’s Department of Government Efficiency (DOGE) has taken a significant turn from its initial goal to reduce federal employment. The organization, which was supposed to cut $2 trillion from the budget and slash government jobs, now appears to be focusing on software development.
The DOGE is exploring ways to improve digital infrastructure in Washington, D.C., but this new direction raises concerns about the potential impact on specific locations, such as the nation’s capital. The federal government employs 3 million people nationwide, with many of those workers concentrated in the D.C. area, where 11% of all jobs are tied to the federal government.
If DOGE were to eliminate 20% of its employees, it would have a limited impact on the overall unemployment rate, which is currently at 4.1%. However, the effect on specific locations, such as the D.C. metro area, could be more significant. A study found that if every single one of those discharged employees were counted as unemployed, it would push the national unemployment rate to 4.3%.
Despite this, many of those displaced workers would likely find new jobs or retire, reducing the actual impact on headline unemployment rates. The DOGE’s shift in focus also highlights the massive scale of the U.S. labor market. In December, 2.6 million Americans quit their jobs and 2 million were fired.
As 2025 data becomes available, it is likely that more federal employees will be laid off or forced to quit. This could have significant economic implications for specific geographies, particularly those with high concentrations of government employment, such as the D.C. area.
The DOGE’s new direction has raised concerns about Elon Musk’s management style, which has been compared to his approach at Twitter. If this trend continues, federal workers and Americans may need to “buckle up” for changes that could impact their jobs and daily lives.
Source: https://www.axios.com/2025/02/05/trump-musk-doge-job-market