The Trump administration, alongside Elon Musk's Department of Government Efficiency, attempted to drastically reduce the staff of the Consumer Financial Protection Bureau (CFPB) by laying off nearly 1,500 employees, which amounts to 90% of its workforce. This move followed a federal appeals court decision allowing conditional firings, but Judge Amy Berman Jackson quickly halted the dismissals, citing that they far exceeded the court's stipulations. The abrupt layoffs, meant to 'right-size' the agency, were criticized for potentially crippling the bureau's ability to function, as critical systems and legal deadlines would be jeopardized. Despite the administration's defense of the firings as reducing waste, internal records and employee testimonies revealed significant planning errors and a lack of consultation with department heads. The court is now set to review the situation further to decide on the future of these terminations and the bureau's operational capability.

The Trump administration sought to reduce the Consumer Financial Protection Bureau's workforce by 90%, retaining only about 200 employees, following a court ruling that permitted conditional firings.

Judge Amy Berman Jackson intervened to halt the mass layoffs, arguing that they went beyond the scope allowed by the federal appeals court, and scheduled a hearing to examine the situation.

Internal communications and legal declarations revealed that the abrupt terminations would severely disrupt the CFPB's operations, leading to potential failures in crucial systems and missed legal deadlines.

The plan to 'right-size' the agency was orchestrated by Mark Paoletta, who, along with other officials, justified the layoffs as necessary to eliminate inefficiencies, despite internal disagreements about the number of staff needed.

Reports indicated that the rushed execution of the layoff plan resulted in numerous mistakes, including inadequate notification for affected employees and a lack of consultation with key department leaders.

Elon Musk's associate, Gavin Kliger, who had no prior government experience, played a significant role in implementing the terminations, further complicating the process.

The hearings will focus on whether the firings would render the legally mandated functions of the CFPB unachievable and assess the legitimacy and impact of the administration's actions.