A federal judge in San Francisco on Thursday found that the mass firings of probationary employees were likely unlawful, granting some temporary relief to a coalition of labor unions and organizations that has sued to stop the Trump administration’s massive trimming of the federal workforce.
The ruling puts one of the most comprehensive pauses so far on the attempts of President Donald Trump’s administration to carry out mass firings across federal agencies.
The case specifically grappled with the involvement and oversight of the Office of Personnel Management, led by acting director Charles Ezell, in directing agencies to cut back their workforces beginning with shorter-term, or probationary, employees.
At a hearing on Thursday afternoon, US District Judge William Alsup ordered the Office of Personnel Management to inform certain federal agencies that it had no authority to order the firings of probationary employees, including the Department of Defense.
The order may have the immediate impact of putting on hold mass firings of federal probationary workers.
“OPM does not have any authority whatsoever, under any statute in the history of the universe,” to hire or fire any employees but its own, Alsup said.
Alsup handed down the order on a temporary restraining order sought by labor unions and nonprofits in a lawsuit filed by the coalition filed last week. He had sought more clarity before the hearing on the extent of the involvement of OPM in directing agencies to cut staff.
A sworn statement from Ezell filed in court told the judge OPM wasn’t conducting a “mass termination program,” and “did not direct agencies to terminate probationary employees, based on performance or misconduct.” Ezell said the individual agencies were “responsible” for taking their own action to cut jobs and review workers’ performance.
Ezell did, however, say he “issued guidance” to federal agencies on Trump’s first day in office, and again this month, that probationary employees weren’t finalized hires in the government and that agencies should “manage staffing levels,” according to the court filing.
Thousands of probationary employees have lost their jobs from several agencies, including the IRS, and the Trump administration has pledged to fire thousands more. The probationary workers have fewer protections from being fired than those who have served for longer time periods in their positions.
The complaint filed by five labor unions and five nonprofit organizations is among multiple lawsuits pushing back on the administration’s efforts to vastly shrink the federal workforce, which President Donald Trump has called bloated and sloppy.
The plaintiffs say OPM had no authority to terminate the jobs of probationary workers who generally have less than a year on the job. They also say the firings were predicated on a lie of poor performance by the workers.
Lawyers for the government say OPM did not direct the firings, but asked agencies to review and determine whether employees on probation were fit for continued employment. They also say that probationary employees are not guaranteed employment and that only the highest performing and mission-critical employees should be hired.
There are an estimated 200,000 probationary workers – generally employees who have less than a year on the job – across federal agencies. About 15,000 are employed in California, providing services ranging from fire prevention to veterans’ care, the complaint says.
The plaintiffs celebrated the order Thursday but noted it was just a first step in their legal fight over the mass firings.
“This ruling by Judge Alsup is an important initial victory for patriotic Americans across this country who were illegally fired from their jobs by an agency that had no authority to do so,” Everett Kelley, national president of the American Federation of Government Employees, said in a statement. “OPM’s direction to agencies to engage in the indiscriminate firing of federal probationary employees is illegal, plain and simple, and our union will keep fighting until we put a stop to these demoralizing and damaging attacks on our civil service once and for all.”
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Unions have recently struck out with two other federal judges in similar lawsuits attempting to stop the Trump administration’s goal of vastly reducing the federal workforce.
The case out of San Francisco so far has gone differently because of Ezell’s apparent focus on the alleged direct involvement of OPM in the federal workforce reductions. In other cases, judges have initially found they may not have authority to step in because other avenues outside the federal courts are available to fired workers.
The MSPB, however, which is one place fired federal workers can go seeking to challenge their removals, ordered the temporary reinstatement of six probationary workers who lost their jobs under Trump’s cutbacks.
The decision earlier this week found that those firings were likely unlawful. Lawyers representing the workers’ interests have vowed to try to expand the board’s finding to apply to thousands more probationary workers.
Alsup said on Thursday the Trump administration should turn over evidence related to the case next week, and a hearing is scheduled for mid-March in the fast-moving court case.
Alsup, who was appointed by President Bill Clinton, a Democrat, has presided over many high-profile cases and is known for his blunt talk. He oversaw the criminal probation of Pacific Gas & Electric and has called the nation’s largest utility a “continuing menace to California.”
This story has been updated with additional details.
Mass layoffs of federal workers could hurt families and local economies — but may not dent the overall economy
Elon Musk, wielding a chainsaw, is overseeing a rapid shrinking of the nation’s largest employer: the federal government.
There’s no doubt the federal government’s 3.02 million-person civilian workforce is massive. Yet some economists are confident the widespread terminations spearheaded by Musk’s Department of Government Efficiency (DOGE) will likely not devastate the national economy or even topple the historically strong jobs market.
“It’s not going to tip the economy into recession by itself,” said Stephanie Roth, chief economist at Wolfe Research.
That’s in part because the federal layoffs are expected to affect a small fraction of the much larger US labor force. The federal civilian workforce, which excludes military personnel and employees of the CIA and other military agencies, represents less than 2% of the total civilian labor force of 170.7 million.
Still, the mass layoffs in the public sector threaten to upend the livelihoods of federal workers and their families, as well as destabilize a traditionally stable economic engine within many communities.
“These are real people. It’s a real hit. This is not something we should be celebrating,” said Joe Brusuelas, chief economist at RSM.
Drop in the bucket
There remains considerable uncertainty over just how many federal workers have been laid off and how many more will be let go in the coming days, weeks and months. That uncertainty is magnified by ongoing legal challenges and threats by Musk for deeper cuts.
As CNN has reported, thousands of probationary workers (who have typically been employed for less than a year or two) have been laid off across various government agencies, including the departments of Energy, Education and Veterans Affairs as well as at the Small Business Administration and the Consumer Financial Protection Bureau.
Roth expects the number of probationary job cuts to eventually climb to around 80,000, up from her current estimate of about 20,000. More than 200,000 employees have worked with the federal government for less than a year, according to 2024 data compiled by the US Office of Personnel Management.
Brusuelas expects the DOGE layoffs to ultimately eliminate between 200,000 and 300,000 jobs in the federal government. Another 450,000 contractors — many of them veterans — could be at risk of losing their jobs, too.
That’s on top of the approximately 77,000 employees who have already accepted the Trump administration’s deferred resignation offers. The offers generally allow workers to leave their jobs but continue to get paid through the end of September.
“It’s a tragedy, but it’s not going to impact the direction of the overall economy,” Brusuelas said, adding that many laid-off government workers could find jobs in the private sector.
But even if the mass layoffs aren’t enough to trigger a recession, they don’t come without risk, said Ron Hetrick, senior labor economist at Lightcast, a labor market data and research firm.
“It puts the variable of uncertainty into the equation. And uncertainty is really bad for the economy and for labor markets, because uncertainty means everybody pauses,” he said. “That’s what the biggest (economic) risk is in the short run right now.”
Broader economic concerns
Economists are paying extra close attention to weekly jobless claims data as well as future jobs reports for signs of increasing stress in the labor market.
Also, not all laid-off employees are leaving the federal workforce. Some have been reinstated and others could become government contractors, likely at a higher pay rate.
“We could have a situation where the labor market data does not deteriorate nearly as much as people are fearing,” said Ernie Tedeschi, director of economics at the Budget Lab at Yale University and a former top economist in the Biden White House.
Of course, the federal layoffs are not taking place in a vacuum.
Businesses are grappling with economic uncertainty and potentially higher costs caused by the Trump administration’s tariffs, among other conflicting forces. On the positive side, businesses have expressed optimism about potential benefits from tax cuts and deregulation.
Some economists expect President Donald Trump’s immigration crackdown to have a far larger impact on the jobs market than the federal layoffs.
The federal layoffs could boost the 4% unemployment rate by 0.05 percentage point, according to Wolfe Research. That’s dwarfed by the 0.2 percentage point hit to the unemployment rate that Wolfe Research projects from the immigration crackdown.
‘We were hoping we’d be safe’
Economists say the DOGE-led layoffs will have a profound impact on local economies where federal employment is concentrated.
Consider that about 23% of federal civilian workers are located in Maryland, Virginia and Washington, DC, according to a December report from the Congressional Research Service.
Mass layoffs in the Beltway could force some residents to put their homes up for sale at depressed values, denting the real estate market. Local businesses that rely on federal workers could be hurt, too.
“The DC economy is going to feel it quite deeply. There can be a domino effect to local businesses,” said Tedeschi.
But it’s not just the Beltway at risk.
Emma Freerks, a 24-year-old living in Iowa City, Iowa, found out on Valentine’s Day that she was being laid off from her job as a physical science technician at the US Geological Survey.
“I was shocked, but not surprised,” Freerks told CNN in a phone interview. “We were hoping we’d be safe because our department brings in money to the government.”
Before her termination, Freerks had hoped to apply for civil servant student loan forgiveness to address her $25,000 of student debt. She worries the federal layoffs are doing more harm than good.
“They spent all this money training me, and that’s going to waste,” Freerks said. “Now I’ll have to go on unemployment, which is still government-funded.”
The ripple effects
In some regions, federal jobs make up 6% or 7% of total employment, including certain congressional districts in Alabama, Alaska, Colorado, Missouri, New Mexico, Ohio, Oklahoma, North Carolina, Texas and Washington.
In Kansas City, Missouri, where about 30,000 federal employees work, the Internal Revenue Services is the city’s largest employer, said Donna Ginther, and economics professor and director of the Institute for Policy & Social Research at the University of Kansas.
“And these are high-paying jobs,” she said. “Some have estimated that there are about 3,000 employees at risk of being laid off in the Kansas City area.”
However, the local economy would have difficulty absorbing those layoffs, she said, noting current job listings requiring a bachelor’s degree.
“In addition, there’s a multiplier effect,” she added. “Whenever somebody loses their jobs, they get unemployment, which only covers a small portion of their total wages, so they stop consuming in the local economy.”
It also goes well beyond consumer spending.
“The other part is that (the administration) is ending government contracts, and they’re cutting expenditures to universities,” said Marcus Casey, an associate professor at the University of Illinois at Chicago’s Department of Economics.
Not only are those places that would align closely with federal workers’ skillsets, but cuts to those anchor institutions have significant downstream effects as well, he added.
That could spell concern for places in Colorado, specifically communities in Boulder County where federal labs have operated for decades and contributed to a high-tech ecosystem.
“Not only are we concerned about the jobs themselves and that they’re high-wage jobs, but (also) the research function that they play and the downstream impacts that these jobs actually have,” said Brian Lewandowski, executive director of the Business Research Division at the University of Colorado’s Leeds School of Business.
As startup-friendly Boulder and Colorado have seen so often: early-stage research ultimately leads to further research or commercialization down the road.
While there are some potential silver linings from attempts to right-size the federal government and curb federal spending, the uncertainty extends beyond near-term job losses, Lewandowski said.
“I think there are a couple of risks (to federal cuts), one that’s front of mind for me is the risk to innovation,” he said. “I think another clear risk is that when this is disrupted, how easy or hard is it to ever put back together? Do we lose something unique that’s been built over many decades?”
Five former US defense secretaries assail Trump’s military firings as reckless
WASHINGTON, Feb 27 (Reuters) – Five former U.S. defense secretaries on Thursday condemned President Donald Trump’s “reckless” firing of the chairman of the Joint Chiefs of Staff and other senior officers and called on Congress to halt any confirmation of their successors.
In a scathing letter, they also accused Trump of seeking to make the apolitical U.S. military an instrument of partisan politics and using firings, which extend to the top army, navy and air force lawyers, to “remove legal constraints on the president’s power.”
The letter was written by four defense secretaries who served under Democratic administrations as well as James Mattis, a retired Marine general who served as Trump’s first Pentagon chief from 2017 to 2019.
“President Trump’s actions undermine our all-volunteer force and weaken our national security,” they wrote.
Beyond Mattis, the letter’s signatories – William Perry, Leon Panetta, Chuck Hagel and Lloyd Austin – served under the Democratic presidential administrations of Bill Clinton, Barack Obama and Joe Biden.
Trump announced the firings late on Friday but his administration has yet to clarify in any detail what caused the unprecedented shakeup, which also included the dismissal of the head of the Navy, Admiral Lisa Franchetti, the first female officer to lead a military service.
Air Force General C.Q. Brown was only the second Black officer to become chairman of the Joint Chiefs of Staff, and he was less than halfway through his four-year term.
“Mr. Trump’s dismissals raise troubling questions about the administration’s desire to politicize the military,” they wrote. “We, like many Americans – including many troops – are therefore left to conclude that these leaders are being fired for purely partisan reasons.”
The White House did not immediately respond to a request for comment on the letter.
Defense Secretary Pete Hegseth, a fierce opponent of diversity initiatives in the Pentagon he says are discriminatory, prior to his nomination had questioned whether Brown had only gotten the job because he was Black.
Asked about the firings, Hegseth told Fox News on Sunday that Brown was honorable but “not the right man for the moment” and said Trump had the right to pick his own team.
The former defense secretaries called on the U.S. House of Representatives and the Senate to hold hearings to “assess the national security implications” of Trump’s dismissals. Trump’s Republican Party holds a majority in both chambers of Congress.
Since taking office for the second time on January 20, Trump has fired and sidelined hundreds of civil servants and top officials at agencies in his first steps toward downsizing the bureaucracy and installing more loyalists.
The letter cautioned that the actions at the Pentagon could deter Americans from choosing a life in the military, should their careers be judged through the lens of partisan politics. It could also have a chilling effect on speaking “truth to power,” they cautioned.
“We write to urge the U.S. Congress to hold Mr. Trump to account for these reckless actions and to exercise fully its Constitutional oversight responsibilities,” they wrote.
Trump picked Dan Caine, a retired three-star general, to replace Brown.
Caine, a retired F-16 pilot, will be promoted to four-star general, and then have to undergo a potentially grueling Senate confirmation process to get a four-year term as the uniformed head of the nation’s military.
“Senators should refuse to confirm any new Defense Department nominations, including that of retired Lt. General Dan Caine as the next Chairman of the Joint Chiefs of Staff,” the former defense secretaries wrote
Bitcoin analyst eyes ‘near term floor’ as crypto fear hits redline
Bitcoin analyst Charles Edwards says a Bitcoin-cycle bottom could be close as negative sentiment continues to build.
Bitcoin’s price could be approaching its bottom this cycle as it lingers below $83,000 and market sentiment remains fearful, according to the founder of a crypto fund.
“Some broader macro data still looks poor, but it also wouldn’t surprise me if we put in a near-term floor locally given the significant level of fear and liquidations,” Bitcoin analyst and digital asset fund Capriole Investment founder Charles Edwards told Cointelegraph.
Bitcoin sentiment improves slightly despite stagnant price
Despite the Crypto Fear & Greed Index — which measures overall crypto market sentiment — tapping a more than two-year low score of 10 on Feb. 26, signaling “Extreme Fear,” Edwards said he doesn’t pay much attention to it.
“I am not a big believer in the Crypto F&G metric and strongly prefer the CNN Fear and Greed metrics, which cover the broader market. It, too, is in extreme fear today. As is the AAII sentiment survey,” he said, referring to a poll by the American Association of Individual Investors.
On Feb. 27, Alternative.me’s Crypto Fear & Greed Index jumped 6 points to an “Extreme Fear” score of 16, even as Bitcoin
showed no signs of a near-term recovery. Bitcoin is down 0.57% over the past 24 hours, trading at $82,260 at the time of publication, according to CoinMarketCap data.
Many observers point to macroeconomic uncertainty and concerns over US President Donald Trump’s proposed tariffs as key reasons for Bitcoin’s and the broader crypto market’s decline. Since Trump’s inauguration on Jan. 20, when Bitcoin hit an all-time high of $109,000, the asset has dropped nearly 24.5%.
Edwards sees the flashing red sentiment indicators as a sign of a market rebound. “We have quite a lot of bearish ‘sentiment’ confluence. Which historically has been a good marker for a potential dip/reversal opportunity,” he said.
Crypto investment research firm Sistine Research said that Bitcoin’s recent dip to $82,242 could mark a near-term bottom.
“Imo ~30% odds that was pico low on BTC,” Sistine Research said in a Feb. 27 X post. However, it warned that if the stock market keeps dropping in the coming days, Bitcoin could find a bottom at $73,000 instead — a level it hasn’t seen since Nov. 7.
The Standard and Poor’s 500 (S&P 500) is down 4.13% over the past five trading days, as per Google Finance data.
CryptoQuant founder and CEO Ki Young Ju recently said the chances of Bitcoin dropping below $77,000 “are low.”
Bitcoin still has “room to run”
Meanwhile, the global economist of crypto exchange Kraken, Thomas Perfumo, said in a Feb. 26 statement that Bitcoin’s structural indicators “suggest that the broader crypto market still has room to run.”
“Right now, dominance remains strong in the low 60s — indicating that market momentum hasn’t yet reached a speculative peak. At the same time, stablecoin market cap has grown 11% year-to-date, signaling continued onchain capital deployment,” Perfumo said.
Collective Shift founder Ben Simpson recently told Cointelegraph that the current market conditions could present a buying opportunity for crypto investors.
