Donald Trump is aggressively pushing forward with plans to shrink the US government by offering eight months’ pay to federal employees who quit their jobs.
They have until 6 February to decide whether to accept the deal, according to a memo from the Office of Personnel Management.
The US government’s human resources agency also warned of future downsizing, reduced remote working and said in future it would enforce “enhanced standards of suitability and conduct”.
There are more than three million federal government employees and the impact of significant job cuts would be unclear.
The government-wide “deferred resignation” scheme excludes immigration and national security-related positions, along with US Postal Service staff.
Up to 10% of employees are expected to accept the offer, according to Sky’s US partner NBC News.
Union: Attempt to entice or scare
A union representing federal employees described the plan as a “purge” targeting workers not considered loyal to the new administration.
“It is clear that the Trump administration’s goal is to turn the federal government into a toxic environment where workers cannot stay even if they want to,” said Everett Kelley, president of the American Federation of Government Employees.
The National Treasury Employees Union, which represents about 150,000 federal workers, warned its members “the email is designed to entice or scare you into resigning”, adding: “We strongly urge you not to resign in response.”
The memo, sent by email to millions of federal employees, said: “If you resign under this program, you will retain all pay and benefits regardless of your daily workload and will be exempted from all applicable in-person work requirements until September 30.”
Elon Musk: Fork in the road
The email subject line “Fork in the road” was referenced in a post on X by billionaire Elon Musk, who is overseeing a government cost-cutting effort. Mr Musk sent an email in 2022 to Twitter employees matching the same subject line.
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The emailed message includes a “deferred resignation letter” for federal employees to begin leaving their posts and invites them to accept by sending a reply with “Resign” in the message body.
Mr Musk posted a message on X, urging federal workers to “hit send”.
Meanwhile, Mr Trump’s government-wide funding freeze, affecting grants and loans, has created widespread confusion and a legal challenge.
The planned freeze is part of a sweeping effort to eliminate certain government spending.
The Office of Management and Budget sent a two-page memo to all federal agencies on Monday, directing them to “temporarily pause” spending that could conflict with the president’s agenda.
On Tuesday, non-profit organisations said they were unable to get into a system used to access federal funds to pay for expenses, like salaries and rent.
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Donald Trump has signed an executive order to open a migrant detention centre at Guantanamo Bay.
Speaking before making the act official, Mr Trump said that thousands of migrants who cannot be deported to their home countries will be held at the complex, on the island of Cuba.
“I’m also signing an executive order to instruct the Departments of Defense and Homeland Security to begin preparing the 30,000-person migrant facility at Guantanamo Bay,” he said.
“Most people don’t even know about it. We have 30,000 beds in Guantanamo to detain the worst criminal illegal aliens threatening the American people.
“Some of them are so bad we don’t even trust the countries to hold them, because we don’t want them coming back.”
It comes as Mr Trump’s controversial pick for health secretary – Robert F. Kennedy Jr. – faced a hearing committee where he was grilled on his views, including on vaccines and abortion.
Guantanamo Bay was set up in 2002 by then president George W. Bush to hold detainees in the wake of 9/11 and the War on Terror.
Only 15 prisoners – including Ramzi bin al Shibh, accused of being a 9/11 co-conspirator – remain at the detention centre.
Optics of using Guantanamo to house deported migrants is stark
Guantanamo Bay is infamous.
A strip of land on the Cuban coast – leased in perpetuity from Cuba since 1903.
It’s the site of a notorious US military prison where detainees were taken and held after the September 11 attacks.
It has become synonymous with the US “war on terror”, with CIA rendition, with torture and with orange jumpsuits.
Beyond the prison (which only has 15 inmates remaining) the site houses a US naval base and a small migrant holding centre – used at the moment to hold migrants who are intercepted at sea trying to reach America.
President Trump’s announcement that he has ordered the Department of Defence to prepare “Gitmo”, as it’s called, to house many more migrants is unexpected.
30,000 beds represents a colossal facility. It is not clear, yet, whether the migrants to be held here will be those intercepted or those rounded up in the US to be deported.
The numbers of migrants currently crossing into the US are very low and the numbers being rounded up are high – this gives an indication of who could be housed there.
In fulfilling its immigration mass deportation pledge, the White House is likely to be faced with significant logistical challenges with holding facilities.
The optics of using Guantanamo to house deported migrants is stark – reflective of the hardline policy being pursued by Trump.
At its peak, about 680 people, most suspected of terrorism and being “illegal enemy combatants”, were held at the American-run prison in Cuba.
The facility has been criticised by human rights groups and legal campaigners over potential breaches of international laws and conditions.
Cuban President Miguel Díaz-Canel deemed the decision as “an act of brutality” in a message on his X account, and he described the base as one “located in illegally occupied Cuba territory”.
In response to Mr Trump’s announcement, former White House communications director Anthony Scaramucci – who briefly served under the previous Trump administration – said: “Also known as a concentration camp.
“Yet no dissent. No courageous political leader willing to stand up to this.”
Earlier on Wednesday, Mr Kennedy – the president’s pick to be health secretary – faced a grilling over his views on vaccines, abortion and Medicaid at a Senate confirmation hearing.
Appearing at the Capitol, Democratic senators raised some of the 71-year-old’s previous remarks comparing the Centers for Disease Control and Prevention (CDC) to Nazi death camps, linking school shootings to antidepressants, and his claim that “no vaccine is safe and effective”.
One senator, Sheldon Whitehouse, told Mr Kennedy “frankly, you frighten people” when discussing an outbreak of measles in Rhode Island – its first since 2013.
The nominee said he did “not have a broad proposal for dismantling” Medicaid – a state and federal taxpayer-funded healthcare programme – and dismissed claims he was anti-vaccine by saying his children were vaccinated.
Mr Kennedy – the son of Robert F Kennedy and nephew of former US president John F Kennedy – was also questioned on his previous support for abortion and was shown statements as recent as from when he was running for president as an independent.
He said he now agrees with the president that “every abortion is a tragedy”.
Federal funding pause memo rescinded
It also comes after Mr Trump’s budget office rescinded an order freezing spending on federal grants – less than two days after it sparked legal challenges across the US.
The order on Monday sparked uncertainty over a financial lifeline for states, schools and organisations that rely on trillions of dollars from Washington.
However, White House press secretary Karoline Leavitt told Sky’s US partner network NBC that the freeze itself has not been withdrawn and that it was simply a cancellation of the memo ordering it.
Shares in Microsoft have fallen sharply after investment spending came in higher than expected in its latest results, released just days after the DeepSeek market shock for tech stocks.
The company, which has received reprimands from shareholders previously over AI-related bills, had already let it be known it expected to spend $80bn this year ahead of its earnings report on Wednesday night.
That AI spending forecast came before Monday’s rout for AI-linked stocks that saw the leading AI chipmaker Nvidia suffer the worst one-day loss in history, with almost $600m erased from its market value.
While it has since clawed back some of those losses, it has left investors pondering whether the levels of investment planned by big US tech as a whole is completely necessary.
It’s all a consequence of the emergence of DeepSeek – the Chinese-owned and developed chatbot currently sitting atop Apple’s app store free downloads.
DeepSeek’s claims to have created the assistant on a shoestring budget – when compared to the vast US investment to date – forced US tech investors to not only question the huge sums involved but also the lofty market values of exposed firms.
Ahead of Monday’s market reaction that saw constituents of the Nasdaq bleed a combined total above €1trn, there had been an 18-month stampede for AI-linked shares.
Microsoft was among those to benefit in that time and among those to face pressure on Monday.
The company, a major shareholder in privately owned OpenAI, lost $7bn in market value.
Analysts said that Microsoft’s latest share price pain was related to slower-than-expected growth in its crucial Azure cloud business between October and December despite an increasing contribution from AI.
Capital expenditure came in $1.6bn higher than consensus forecasts.
Just hours earlier, the company announced that it had added DeepSeek’s model to its offerings on Azure.
Shares were up to 4% lower in after-hours trading despite both group revenue and profits beating estimates.
Lord Mandelson says calling Donald Trump a “danger to the world” in 2019 was “ill-judged and wrong”.
The former Labour minister has been named as the next UK ambassador to the US, although there have been questions about whether President Trump will accept him.
Speaking to Fox News, Lord Mandelson walked back his criticisms from the president’s first term in office.
The 71-year-old told the conservative-backing US TV channel: “I consider my remarks about President Trump as ill-judged and wrong.
“I think times and attitudes towards the president have changed since then.
“I think people have been impressed, not just by the extraordinary second mandate that he has received from the American people, but the dynamism and energy with which he approached not just the campaign but government as well.”
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1:52
Could Trump stop the new UK ambassador?
Many Labour figures, including the now Foreign Secretary David Lammy, criticised Mr Trump before, during and after his first term in the White House.
Now they are in government and Mr Trump is back in power in Washington DC, language has become more diplomatic.
Lord Mandelson told the Alain Elkann Interviews podcast previously: “What Donald Trump represents and believes is an anathema to mainstream British opinion.”
He added: “Even those who have a sneaking admiration for Donald Trump because of his personality, nonetheless regard him as reckless, and a danger to the world.”
The likely new ambassador criticised Mr Trump’s attitude to a previous holder of that office, and said the president was “little short of a white nationalist and a racist”.
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Speaking now, Lord Mandelson praised Mr Trump, saying he was a “nice” and “fair-minded person” who could become “one of the most consequential American presidents I have known in my adult life”.
He added: “I think that with the approach he is taking to government, which frankly just seems to us in Britain so much more organised, it’s so much more coherent, he seems to be so much more clear in what he wants to do, we take encouragement from that, that gives us greater confidence.”