A new wave of federal layoffs has once again impacted government employees responsible for regulating Elon Musk’s companies. This time, the U.S. Food and Drug Administration (FDA) has cut multiple staff members involved in overseeing Neuralink, Musk’s brain-chip company. According to Reuters, these employees, who managed applications for clinical trials, received termination notices over the weekend.
The job cuts are part of a larger federal workforce reduction initiative led by the Department of Government Efficiency (DOGE). As part of these cuts, 20 employees from the FDA’s Office of Neurological and Physical Medicine Devices were dismissed. While the layoffs are being framed as part of an overall downsizing effort, critics argue they disproportionately impact agencies investigating Musk’s businesses.
With fewer personnel to review applications, regulatory processes could slow down or become rushed, raising concerns about oversight. Industry experts warn that the lack of staff could either delay approvals or create pressure to fast-track decisions—an outcome that could benefit Neuralink.
Investigations Into Musk’s Companies in Jeopardy
The impact of these layoffs extends beyond the FDA. According to The New York Times, 11 federal agencies affected by DOGE’s workforce reductions are currently handling investigations, complaints, or enforcement actions related to Musk’s companies. In total, 32 active cases could now face delays or even be abandoned due to staff shortages.
Neuralink, in particular, has been under scrutiny. Last month, the Inspector General of the U.S. Department of Agriculture (USDA) was forcibly removed from her position after she resisted an order she believed to be an illegal termination. She had been leading an investigation into potential animal welfare violations at Neuralink’s testing facilities.
Similarly, the FDA has been closely monitoring Neuralink’s animal testing practices. In 2023, the agency reported “objectionable conditions or practices” at the company’s research labs but took no disciplinary action. In 2022, the FDA initially rejected Neuralink’s human trial application over safety concerns, only to grant approval for limited trials a year later. In 2024, the agency even gave Neuralink its “breakthrough device” designation, which expedites the approval process.
Mass Layoffs Across Health Agencies
The FDA layoffs are part of a broader restructuring within the U.S. Department of Health and Human Services (HHS). Last Friday, HHS announced 5,200 job cuts, affecting key agencies such as the Centers for Medicare and Medicaid Services (CMS), the Centers for Disease Control and Prevention (CDC), and the National Institutes of Health (NIH).
Most of the employees affected by these cuts were probationary staff with less than two years of service, making them more vulnerable to dismissal. However, some sources told Reuters that despite performance issues being cited as the reason for termination, several dismissed employees had recently received positive performance reviews.
Experts worry that these cuts could jeopardize the regulatory process for medical devices and pharmaceuticals, potentially slowing down approval timelines and raising safety risks.
Growing Concerns from Health Organizations
The job cuts have sparked backlash from medical and patient advocacy groups. A coalition that includes Friends of Cancer Research and the American Diabetes Association released a statement warning that these layoffs could undermine the country’s leadership in health research and put public safety at risk.
“The cumulative effects of threatened cuts to federal health research funding and forced departures at our nation’s premier health agencies will put our global leadership and our nation’s health at risk,” the coalition stated.
Neuralink’s Progress Despite Regulatory Uncertainty
Despite ongoing regulatory challenges, Neuralink has continued its rapid expansion. The company is developing a brain-computer interface (BCI) implant that could enable paralyzed individuals to control devices using only their thoughts.
In May 2023, Neuralink received FDA approval for its first human trial. Last month, the company successfully implanted its device in a third patient, with Musk announcing plans to complete 20 to 30 additional implants by the end of the year.
Musk’s Influence on Government Decisions
Musk’s involvement in both DOGE and Neuralink has raised questions about conflicts of interest. When DOGE was launched, Musk was expected to lead the cost-cutting initiative. However, the White House has since denied that he holds an official role, stating in a recent court filing that he is not an employee and lacks direct decision-making authority.
Despite these denials, Musk’s influence on government personnel decisions remains evident. The Office of Personnel Management (OPM) has implemented workforce reductions mirroring Musk’s mass layoffs at X (formerly Twitter), offering buyouts to about 2 million federal employees. Additionally, Wired reported that several new hires at OPM have direct ties to Musk’s businesses, including a 2024 high school graduate who previously held a summer job at Neuralink.
Adding to concerns, White House Press Secretary Karoline Leavitt recently stated that Musk will determine his own conflicts of interest when it comes to government involvement—a statement that has sparked further controversy.
Will These Layoffs Save Money?
While DOGE’s mission is to cut government costs, experts question whether these mass layoffs will actually reduce federal spending.
Patti Zettler, a law professor at Ohio State University and former deputy general counsel to HHS, argues that eliminating positions funded by user fees—charges that companies pay to expedite product approvals—will not result in taxpayer savings.
“When we think about all of the layoffs across HHS, none of them are going to save the taxpayer money in the long run,” Zettler told NPR. “It is especially clear that laying off FDA staff who are funded by user fees will not save taxpayers any money. The taxpayers are not paying for these employees.”
Meanwhile, newly confirmed HHS Secretary Robert F. Kennedy Jr. has expressed opposition to pharmaceutical user fees, claiming they create barriers for smaller companies seeking regulatory approval.
The Road Ahead
As federal agencies continue to downsize, concerns are mounting over regulatory oversight, corporate influence on government operations, and the future of medical technology approvals. While watchdog agencies lose key personnel, investigations into Musk’s companies may stall, potentially benefiting Neuralink and other Musk-led ventures.
With industry experts, public health organizations, and legal professionals raising alarms, the debate over these government workforce cuts—and their long-term impact—is far from over.
