Government Efficiency Gone Wrong
Why cutting costs without purpose harms government and the people it serves
In 2023, Mark Zuckerberg launched his “year of efficiency” at Meta by firing 10,000 employees, in addition to the 11,000 workers let go the previous year. Meta wasn’t alone. Pandemic profits buoyed by government handouts had come to an end, giving way to the economic uncertainty and inflation that followed the termination of lockdowns and COVID restrictions. Tech companies adjusted. The trend has continued beyond 2023, with tech firms cutting over 130,000 jobs across 457 companies in 2024. Like Meta, most of these cuts are framed as efforts toward “efficiency.” When Elon Musk acquired what was then Twitter, he implemented a “health plan” that involved terminating 6,000 of the company’s 7,500 employees.
Musk’s influence has extended into government with the creation of the Department of Government Efficiency (DOGE), a quasi-official initiative aimed at trimming $2 trillion in federal spending. This effort, spearheaded by Musk and his former junior partner Vivek Ramaswamy, has produced few concrete ideas so far. The primary contribution has been ending remote work for government employees—a move that seems more effective at pushing workers to quit than improving efficiency.
The Quest for Efficiency
When I am not writing articles for Democracy’s Sisyphus, I work at a fintech company. From my years working in this industry and others, I have had a front-row seat to the tech sector’s view of productivity and resources. Over the past few years, my company has implemented its own headcount reductions. I’ve seen firsthand how these cuts impact the actual products. When employees are forced to decide between staying in a precarious job or leaving, it’s often the most competent workers—the ones confident they can find other opportunities—who exit.
The competent employees who do remain are rarely rewarded. Instead, they’re saddled with increasing workloads to compensate for the underperformers who stay. These employees frequently go unrecognized and unrewarded. While this might appear “efficient” on paper, as fewer people take on more work, it merely delays the inevitable inefficiencies caused by burnout. Worse, this version of “efficiency” does little to improve products, services, or customer satisfaction, creating a ticking time bomb of dysfunction.
This phenomenon isn’t unique to my observations. It aligns with the Macquarie Dictionary’s 2023 word of the year, “enshittification”. As tech companies mature, they prioritize cost-cutting and charging more for less, leading to declining product quality. This trend extends beyond tech. A 2022 study by the National Bureau of Economic Research found that companies led by “business managers” often see wages decline by 6% and labor share drop by five percentage points. These managers tend to view workers “not as stakeholders in the corporation but rather as sources of costs to be reduced”. The study found “no compelling evidence that business managers are more productive or adaptable”. Put in plain language, most business managers want to pay fewer people less money, they see rewarding employees as wasteful. The product and the business don’t perform any better as a result of their efforts.
The U.S. executive branch is a large, bloated, and wasteful enterprise, but it performs essential functions. Efficiency is a worthy goal, but it must avoid the “enshittification” of federal government services. Having fewer employees isn’t efficiency; instead, efficiency requires fewer employees. Efficiency requires finding, retaining, and rewarding qualified and competent employees who focus on meaningful work. From that point of view, the underlying notion of the DOGE process needs to be flipped on its head. Reward the desired behavior.
To succeed, DOGE must invert its current mindset. Rather than treating all government employees as wasteful and lazy until proven otherwise, it should focus on retaining high performers. A 2020 survey of federal employees revealed that only 51% felt high performers were recognized and rewarded. DOGE’s initial approach—removing incentives and rewards—seems based on the flawed assumption that government employees should work altruistically. This is a mistake. Incentives for good employees aren’t wasteful—they’re essential for attracting and retaining talent, which should be the desired outcome.
Mark Ma, an associate professor at the University of Pittsburgh, recently published a study showing that return-to-office (RTO) policies often “push out the most talented employees.” Ma explains, “Who will leave? It’s just the people who have other opportunities… And these are the people with a lot of skill, with a lot of experience that corporations want.” It’s not just RTO policies that create this effect. Any workplace that becomes inhospitable to good employees risks driving them away. “Dedication” to a job doesn’t equate to competence.
The executive branch employs 2.3 million civilians. Some of them are undoubtedly poor performers. The same federal employee survey found that only 42% felt poor performers were effectively dealt with. Removing bad employees is critical, as it rewards good employees by alleviating their workload. Policies that treat all employees as bad or drive out good employees are counterproductive.
I have personal experience with this. At a previous job, my satisfaction was already declining when my employer hired someone to do the same job as me. Most of my coworkers and I felt this person struggled with the role, but my boss, who had hired them, seemed to think otherwise. Seeing a subpar employee treated as excellent every day was the final push I needed to find a new job.
Unions bear a great deal of the responsibility. Unions of all kinds (teachers, police, auto, etc.) prioritize protecting all members over rewarding high performers. To serve their members effectively, unions should root out underperformers just as they advocate for top employees.
Making Government Efficient
Before it is even possible to identify high performers, it is essential to understand the desired outcomes of a government department or agency. Many employees underperform because incentives are misaligned or because management focuses on irrelevant metrics. Unlike businesses, the federal government lacks clear financial indicators like profit margins or stock prices. This difference should be embraced. Employees should be evaluated based on how well they contribute to their agency’s goals. For example, Charity Navigator assesses charities using four metrics, holding them accountable for how they use donations. Impact and measurement, accountability and finance, Leadership and adaptability, and culture and community. Similarly, the federal government, essentially a charity funded by mandatory donations from its citizens, should be held accountable for how it uses that money. Employees should be judged by how well they contribute to the intended outcome of the agency for which they work.
A company is a group organized to create a product or service, and it is only as good as its people and how excited they are about creating.
Great companies are built on great products. When the product starts to become shoddy and uncompetitive, so does the company.
In order to make the right decisions, you have to understand something. If you don’t understand something at a detailed level, you cannot make a decision.
Those are all quotes from Elon Musk.
That is the DOGE that the federal government needs. DOGE must first understand what government departments aim to achieve and then focus on attracting and rewarding employees who contribute to those outcomes. Only then can it effectively weed out those who don’t. Starting from the assumption that all government employees are “bad” risks creating a federal workforce even less capable of serving the public, even if the cost is less. Efficiency is the sum of the cost and benefit. Focus on improving the benefits, and the cost-cutting will follow.