The Capitol at Night

It remains unclear the extent to which the order will impact agencies like FDA.

By John R. Manthei, Elizabeth M. Richards, Trevor Thompson, and Maya Frost-Belansky*

On February 11, 2025, as part of an ongoing effort to reduce the size of the federal workforce, President Trump issued an executive order titled “Implementing the President’s ‘Department of Government Efficiency’ Workforce Optimization Initiative” (the Order). Elon Musk, who oversees the Department of Government Efficiency (DOGE), addressed questions from reporters in the Oval Office as President Trump signed the Order.

Key Elements of the Order

The Order:

  • Directs agency heads to promptly undertake preparations to initiate large-scale reductions in force
  • Requires the Director of the Office of Management and Budget (OMB) to develop a plan requiring that each agency hire no more than one employee for every four employees who depart
  • Commands agency heads to prepare hiring plans requiring that any new career appointment hiring decisions are made in consultation with the agency’s DOGE team leads
  • Specifies that agencies may not fill vacancies for career appointments that the DOGE team lead assesses should not be filled (although the Order allows agency heads to override the DOGE team lead’s assessment if necessary)
  • Requires the DOGE team lead to provide the United States DOGE Service Administrator with a monthly hiring report for each agency

Further, each agency head is charged with producing an Agency Reorganization Plan that “identifies any statutes that establish the agency, or subcomponents of the agency, as statutorily required entities” and “discuss[es] whether the agency or any of its subcomponents should be eliminated or consolidated.”

Potential Impact of the Order

If implemented and enforced as written, the Order will have a significant impact on the activities of federal agencies. It remains unclear, however, the extent to which the Order will impact agencies like the US Food and Drug Administration (FDA), whose activities are funded in large part by industry user fees.

The Order, together with the January 20, 2025, executive orders imposing a hiring freeze and requiring all federal employees to return to full-time in-person work, as well as the Office of Personnel Management’s January 28, 2025, “Fork in the Road” email to over 2 million federal employees incentivizing exits via “deferred resignation,” appears likely to lead to the loss of highly specialized staff with deep technical knowledge. Consequently, in the case of agencies like FDA, on whom industry relies for prompt review of marketing applications and decisions enabling the launch of new products, an exodus of employees is likely to negatively impact FDA’s ability to meet its performance goals and timelines, and to reduce the quality of review and speed of decisions.

To avoid these potentially drastic consequences, former FDA Commissioner Scott Gottlieb has recommended that industry leaders push for legislation in the upcoming reconciliation bill that will extend user fee agreements at the same funding levels for another year or two to avoid the most sweeping consequences of the Trump administration’s deregulation initiative.

Latham & Watkins will continue to closely monitor whether this proposal gains traction and how the incoming head of HHS prepares the Agency Reorganization Plan.

*Not admitted to practice in D.C. Admitted in Colorado. All work supervised by a member of the D.C. Bar.