Trump tapped Elon Musk to oversee government efficiency. Here's how he's cut costs at his own companies.
President-elect Donald Trump tapped Elon Musk to co-lead a new Department of Government Efficiency to reduce government spending along with the businessman Vivek Ramaswamy.
At companies such as X, Tesla, and SpaceX, Musk is known for modeling an intense work ethic and making drastic workforce reductions to lower costs. One longtime Tesla executive who quit in August wrote on LinkedIn that working there was "extraordinary" but "not for the faint of heart."
Here's how Musk has managed efficiency in his own business ventures.
Musk, X, Tesla, and SpaceX didn't immediately respond to requests for comment.
When Musk took over Twitter in 2022, he ended the company's remote-work policy and free office lunches.
Weeks after acquiring Twitter, which he later rebranded as X, Musk sent an email at about 2:30 a.m. in November 2022 announcing the end of remote work at the company, writing that "the road ahead is arduous and will require intense work to succeed."
Musk also required employees to start paying for office lunches that had previously been free, was reported to have told them to expect 80-hour workweeks, and urged them to approach their jobs with "a maniacal sense of urgency."
Musk cut about 50% of Twitter's staff and set an expectation for those who remained to "work 24/7."
In November 2022, Musk laid off about half of Twitter's roughly 7,500 employees.
Business Insider previously reported that some laid-off employees were asked to return to work the day after the sweeping cuts, but some refused.
In a midnight email obtained by BI, Musk issued an ultimatum for those who remained: commit to an "extremely hardcore" work schedule with "long hours at a high intensity" or get fired and receive three months of severance.
When Twitter employees criticized Musk's leadership on the online platform and in internal Slack messages, Musk fired them.
Representatives for Twitter didn't respond to a previous request for comment.
Tesla's employee handbook instructs workers to do whatever is necessary to maximize their performance, even contacting Musk directly.
Tesla's "Anti-Handbook Handbook" details the high bar the company sets for employees, instructing them to be self-reliant and do everything they can to solve problems, even if it means forgoing office protocol or reaching out to Musk directly.
"Your #1 job — everyone's #1 job — is making this company a success," the handbook says. "If you see opportunities to improve the way we do things, speak up even if these are outside your area of responsibility. You have a personal stake in Tesla's success so make suggestions and share your ideas. Your good ideas mean nothing if you keep them to yourself."
Musk also sent a memo in 2018 advising Tesla employees to "walk out of a meeting or drop off a call as soon as it is obvious you aren't adding value," BI previously reported.
Musk has been known to sleep on Tesla's factory floor and said he once lived at Tesla's factories for "three years straight" to inspire his workers.
In 2018, Musk said he spent nights sleeping on a couch and the floor at Tesla factories while the company ramped up production on the Model 3 sedan.
"The reason I slept on the floor was not because I couldn't go across the road and be at a hotel," he told Bloomberg. "It was because I wanted my circumstances to be worse than anyone else at the company. Whenever they felt pain, I wanted mine to be worse."
At the 2022 Annual Baron Investment Conference, Musk said he lived at Tesla factories in California and Nevada "for three years straight" to inspire employees to "give it their all" and show them he was working just as hard.
In April, Tesla laid off 10% of its workforce as Musk said the company needed to be "absolutely hard core about headcount and cost reduction."
In a late-night companywide email announcing the layoffs, Musk also called for the resignation of any Tesla executive with more than three direct reports who "don't obviously pass the excellent, necessary and trustworthy test."
The staff reductions occurred after Tesla reported an 8.7% year-over-year revenue drop.
SpaceX's reusable Starship rocket aims to make rocket launches cheaper and more efficient.
As part of Musk's future goal of colonizing Mars, SpaceX is working to build the first fully reusable rocket system, which could make rocket launches 10 times cheaper.
In October, during the Starship rocket's fifth test flight, the Super Heavy booster successfully flew back to the launch site, and the Starship vehicle made a controlled landing in the Indian Ocean — a huge step toward reducing the cost of space travel.
Former SpaceX employees have also described a work environment where efficiency reigns supreme.
In 2019, Musk laid off 10% of SpaceX employees in order to "become a leaner company," a SpaceX spokesperson previously told BI.
In an as-told-to essay for BI, Vincent Peters, a former SpaceX employee, described the work culture as "ruthlessly efficient," with people encouraged to walk out of meetings if they weren't adding anything or gaining value from them.
"In one instance, a government customer came in with a 50-slide deck," Peters said. "Six slides into the presentation, 75% of the room had walked out. I had to tell him that if he didn't get to the point, I'd be the only person left in the room — and only because I had to walk him out. He skipped ahead to his last five slides. That kind of environment makes you much more efficient."
Jim Cantrell, who worked as SpaceX's vice president of business development in the early 2000s, said Musk could be "vicious."
"If you are aligned with his vision and immune to a very strong boss who's very demanding of your time and your thoughts, then it's going to be a very fun ride," Cantrell said in an essay for BI about working for Musk.
