Court Blocks Trump’s Federal Layoff Plan, Musk-Backed Overhaul Stalled

A U.S. appeals court has blocked President Donald Trump's administration from proceeding with mass layoffs of federal workers and a sweeping government reorganization. The San Francisco-based 9th U.S. Circuit Court of Appeals upheld a lower court ruling that barred the plan, marking a major setback for the Trump-Musk-backed overhaul efforts.

The case centers on an executive order aimed at restructuring about 20 federal agencies by slashing tens of thousands of jobs, eliminating regional offices, and automating government functions. The order, spearheaded by the Department of Government Efficiency (DOGE) and strongly supported by Elon Musk, was deemed by U.S. District Judge Susan Illston to exceed presidential powers without congressional approval.

In a 2-1 decision, the appeals court agreed, stating the administration failed to show it would face irreparable harm if the lower court’s block remained. Judges William Fletcher and Lucy Koh, both appointed by Democratic presidents, argued that only Congress holds the authority to create and fund federal agencies. Republican-appointed Judge Consuelo Callahan dissented, saying the administration was likely to win on appeal.

Illston's ruling cited severe consequences of the layoffs, including near-total staff cuts at a Department of Labor office in Pittsburgh and deep reductions at agencies like Head Start and Social Security. The ruling also halted further action by DOGE, which had been working with agencies to implement job cuts since February.

The White House criticized the ruling as an overreach by the judiciary, while unions and advocacy groups praised it as a victory for constitutional checks and balances. The administration is expected to appeal to the U.S. Supreme Court.

This decision halts one of the most aggressive federal workforce reductions in U.S. history, reflecting growing legal resistance to executive-driven agency restructuring.