Mass Government Layoffs! How Will It Impact Your Business

DOGE has been busy over the past several weeks. Mass layoffs in government offices could potentially flood the marketplace with new potential hires. Is that a good thing? T

his episode of Books & The Biz will look at what having a large increase in available hires could do to impact you. Our thoughts may surprise you.

Join us and remember to like, share and subscribe.

[00:00:10.08] - Alice

Hello. Welcome to Books in the Biz, a podcast that looks at both the financial and operational sides of success. Please welcome our hosts, Dan Paulson and Richard Veltre. Dan is the CEO of InVision Development International, and he works with leaders to increase sales and profits through great cultures with solid operations. Rich is CEO of the Velte Group and a financial strategist working with companies to manage their money more effectively.Now on to the podcast.

[00:00:46.00] - Dan Paulson

Welcome back to Books in the Biz. Rich, how are you doing?

[00:00:48.07] - Rich Veltre

I'm good, buddy. How are you?

[00:00:50.03] - Dan Paulson

I'm doing well. I'm a lot less blonde, a lot more tan, and a lot more gray than the last co-host you had. But I hear you guys had fun, and it sounds like you did a good job while I was off gallivanting about the Southern Caribbean.

[00:01:07.29] - Rich Veltre

Very cool. No, we did a good job. We had a nice conversation, but you were missed, my friend. You were missed.

[00:01:16.02] - Dan Paulson

Well, it's good to be missed. It's good to be missed. Well, now that we talked about marketing last week, which sounded like a hell of a lot more fun than maybe the subject we're going to talk about today, this government is the gift that keeps on giving at least for source material for our discussions here. This is the truth. So, yeah, even while I was gone, the Department of DOGE, the Department of Government Deficiency, efficiency efficiency. We'll see if it's efficient or not, has been actively scouring the empty halls of government and trying to find ways to eliminate bodies and decrease payrolls. And what's interesting now is now we're starting to see the early effects of that with a lot of people coming out into the marketplace. And we both thought this would be something interesting to talk about because we've talked for years about how private companies are struggling to find key talent, experienced individuals. And from my perspective, I'm just curious what your thoughts are on, is this going to solve the problem? Are we going to see more private sector jobs get filled that were sitting empty in key positions?

[00:02:31.25] - Rich Veltre

Well, that's a great question. And I think it's one for the ages. I'm not really 100 % sure whether it will be a good thing or a bad thing. It's a surprise thing. So I think there's a little bit of contemplation, a little bit of analysis, a little bit of, let's wait and see, because no one expected there was going to be this many people under target, right? I think it's so broad sweeping. It's shocking. Is it necessary? You could really argue that it is. I mean, if you're telling me that the government can really operate with 40 % less people, using a straight number, I didn't get that number from anywhere. But if they're going to cut that many people, and the government still operates the same way as it did before, wow, that's just so over inflated. And I can't believe that went on for that long, and no one ever did anything about it. But the people that are in charge of this have had a habit of going a little bit too far and having to cut back or bring back. And so I'm a little worried that this is just for the news cameras and a big push.

[00:03:55.17] - Rich Veltre

And then all of a sudden it's going to be we have to go back a little bit because we went too far.

[00:04:00.06] - Dan Paulson

Yeah, I agree with the whole shock and awe thing. I think that's been a big part of what they're trying to do here. In the first 30 days, of course, there have been a number of policy moves and pushes. And Some of them I definitely agree with, some of them not so much. We all just have to say, let's wait and see what comes out of this, because what's going to happen is going to happen, right? So DOGE isn't going away tomorrow, no matter how much anyone complaints about it. And you might complain about the actions they take. But I do agree that there probably is a fair amount of inefficiency in government because unlike private sector, government doesn't have to produce a product. They don't have to be profitable. In fact, they really don't have to be profitable because they can print money. So if they want more, they can just turn on the printing presses and solve the problem that way, which, of course, doesn't solve the problem. It just pushes the problem down the road further. I saw an article, I think it was this morning. I wish I had saved But they were talking about how recently fired government employees are struggling to find work.

[00:05:08.03] - Dan Paulson

So I found that interesting, considering unemployment is still fairly low. And I'm wondering why some of these people are having trouble finding jobs. Now, I have some guesses, but I'm unsure why that might be happening. Do you have any ideas?

[00:05:26.09] - Rich Veltre

I don't really have anything factual, but I I would say that the government doesn't operate like a business. Our president is trying to run the country like it's a company. And to a certain extent, a lot of the policies or a lot of the procedures, a lot of the workflows should be the same. But like you said, it's a big factor that there's no real product. It's just a service that that our taxes actually go into the government and provide certain services for certain things. So the fact that these people are coming out, I'm hopeful that they're not finding jobs because they don't necessarily have the task or the experience on their resume that matches perfectly what an outside private sector company would be looking for.

[00:06:26.08] - Dan Paulson

You are so mean.

[00:06:27.28] - Rich Veltre

What?

[00:06:29.01] - Dan Paulson

I said, you are so I mean? I am mean. Hope they don't find a job. Come on. I'm spoken like a true accountant. Protect those books.

[00:06:40.00] - Rich Veltre

I can't help but wonder. I've seen what some people come out of government can do, and some of it is extremely impressive. So I'm not going to knock anybody down. But it doesn't necessarily match with what's going on in the private sector. So if it doesn't match, people are going to say, well, let's wait. And at that point, these other people can't find a job because the jobs aren't necessarily matching up perfectly to what they've been doing for the last however long they've been in the government.

[00:07:15.08] - Dan Paulson

Well, and you do have to find a way to adapt your skills. And I think this is probably where you and I are in alignment on a lot of this is the people that are currently unemployed, are their skills transferable? I'm sure there's many skills that are, but are they communicating it that way? I also believe there might be somewhat of a stereotype of a government employee. And is this somebody, if we hire them, that they can be productive and they can do a good job for us. And as you said, there's a lot of very talented people that have worked in government for years and are very productive and bring a lot of skills. But I'm guessing those are the people they're trying to keep if they have a need. It's the ones that, for example, the email where, tell me five things that you did in the last week in your job role with government. And there's a lot of people that aren't answering that. And I'm looking at that going, well, you know what? If you get let go, guess what's the first thing your new interviewer is going to ask you?

[00:08:20.25] - Dan Paulson

What did you contribute to the last job you were in? So if nothing else, this should be a good skill builder on building that messaging instead of just blowing it off and saying, well, I don't need to tell these guys what I do. It's not important to them. I think that's where the frustration with a lot of people in the American public, and I think a lot of business owners even is, okay, why can't you tell us what you're doing? Where is the transparency there? If I were working with a company or working for a company as an employee, I guarantee at least once a year, somebody is going to formally sit me down and ask me what I produced for them, what value I brought to them over the course of the previous 12 months. Now that's done for a couple of reasons. One, it's done to probably pay me more money if they deem me worthy of it. And two, it's also to see the value, demonstrate the value that I bring so that they can adjust that raise accordingly or help provide me with support to develop my skills further so I can be even more successful where I'm at.

[00:09:26.15] - Dan Paulson

When you find these situations where there's this huge pushback, and then there's this huge fight about it, too. It just shocks the heck out of me that the private sector people who do have work daily jobs that aren't government related are pushing back and saying, well, no, they don't have to tell them what they're doing. Well, don't you have to tell your boss what you're doing? Don't you have to report to them what you're working on? I think that's a pretty common thing. Essentially, a government employee is our employees because our tax money goes in to pay their salaries. So how does that affect business, though? I mean, that's ultimately when we started talking about this, what's the impact it's going to have on companies? And I think as these people come in the workplace, if A, they are struggling to find a job with an employer, they're going to have to do something. So B, the natural thing is you hang your own shingle and you put out there and consult on whatever particular skillset you have, in which case then you have to go out and find somebody looking for that level of experience.

[00:10:35.05] - Dan Paulson

So one of the things I think is going to happen here in the coming weeks or months, as we see more and more people being let go, I forget what other department they just recently announced that they pretty much gave them 48 hours to go in and clear out their desk. These people are going to have to do something, and they're going to become either coaches, consultants, fractional people, much like we spend a lot of our time talking about. And there's going to have to be a lot more vetting, I think, from different companies on, do these folks have the experience and the qualities that even they could bring in on an interim basis?

[00:11:12.21] - Rich Veltre

Yeah, I think that's the biggest challenge is understanding or getting a feel for how that's going to affect the overall employment marketplace. I think that, again, just because they flood the marketplace does not fill that divide. If the people weren't finding jobs already, flooding a whole lot more people into the same pool doesn't solve the problem. And so the biggest thing is I think the thing I have the most frustration with is the rigidity on both sides. So when you think about the fact that, okay, somebody couldn't find a job, right? Somebody coming out of the government couldn't easily find a job? Well, I think there's a rigidity of the non-government employer to bring in a government employee. And at the same time, there's some rigidity from the government employee who wants it to work like he had his other job, and not necessarily willing to adapt to show that they do have the skillset, or they do have the ability to take this job, and I'm going to bring a lot of value. So that rigidity, like you mentioned, they You don't have to say that. Why not?

[00:12:33.29] - Dan Paulson

Yeah.

[00:12:34.24] - Rich Veltre

I mean, this is the mentality that seems to have gotten lost. If you're going to come work for me and I ask you a question, you're not going to be able to say, well, I'm not going to answer that question. Well, I'm not going to I gave you a paycheck this week. Bye.

[00:12:47.03] - Dan Paulson

Thank you very much. Well, I think the legality of that might not be so good, but I could see where that could lead to a very short term job, at least.

[00:12:55.24] - Rich Veltre

Yeah. I mean, look, I- Your future paychecks are in jeopardy. I do tend to be a little bit more flamboyant than how it would work. But if you're not going to answer the question, I'll get my first HR write up, and then I'll get the second HR write up, and then there's three strikes, and you're out. So okay, we'll go back to that. But I think there is a certain level of that rigidity that bothers me, that you're You're not going to find middle ground. You're not going to get these people employed if everybody takes a rigid stance of, well, this guy, I can't believe he did this to me. It happens outside of the government all the time, that But somebody changes focus, changes the way they're going to go, and suddenly you're the guy who's left without a job. Happens. And the government tended not to happen, if you ask me, from the stories that I've heard, just from the stories I've heard, that you didn't get the same effect. So there probably is a lot of stuff that they can cut, positions that they don't necessarily need. So I just hope they're doing enough of a due diligence upfront to realize that these are the ones that they don't need.

[00:14:17.05] - Rich Veltre

And this fits the definition of what has to go and not just, well, we're just going to shrink the government and then we'll figure it out later.

[00:14:23.10] - Dan Paulson

Right. And to me, that's probably the biggest concern. I think we've all seen Millie, who's what? Our Argentina. Is that where he's from? I can't think of his first name. But you saw the pictures of him when he was in the election season where he's holding that chainsaw up and running that chainsaw and saying, I'm going to take the chainsaw, I'm going to cut government. Now, down there, it was far more dire than up here because their inflation was running rampant, and they were all targeting programs that did nothing to support the good of the people, except for an exceptional few. And if he didn't cut those programs, they would see continued inflation rise. Now, I think they're starting to get some of that into check. I don't think, again, everything's been done perfectly, but this is also a good example of typically how government works. It's not a scalpel, it's a sledgehammer or a chainsaw. And you just go in, you rip it all out. And usually, again, the cuts too deep. And then you figure out you got to rebuild back up. I guess that's not all different from some businesses, especially large corporations.

[00:15:25.07] - Dan Paulson

I think they all run through that cycle. Smaller businesses have far fewer resources, so they're a lot more cautious about what they hack at because they know if they cut too deep, it's going to be much harder for them to refill that position or regain that experience. But, yeah, it's really interesting to sit here and watch all this go about. And again, you look at some of it and go, I can see why they're doing that. You look at other stuff and go, God, I'd like to know more information on why they're doing that much. And I think that's the hardest part from the outside looking in. We get limited information. That information typically comes from the media. As we know, whether it's left or right, media is biased. So are we getting the full story on why certain positions might be cut? That there And the arguing should be kept because I think whenever you're in self-preservation mode or you're in trying to preserve your department, you're going to try to justify why you need each of those people there. And it is really a situation where it's just gotten too carried right away.

[00:16:30.10] - Dan Paulson

Government just continues to grow. We keep adding more people. And now we run into a situation where it's bloated and you have to figure out where the line is.

[00:16:40.19] - Rich Veltre

Yeah, I think a couple of points. I think I I can't help because I didn't do a lot of following when Elon Musk bought X. Well, we bought Twitter, right? X, right? And immediately, all these people lost their jobs, right? And then he's From what I gather, he's been rebuilding it from there.

[00:17:03.22] - Dan Paulson

Right. With about half the staff that he had before. Yeah.

[00:17:08.05] - Rich Veltre

So my guess is that we're following somewhat the same model. Again, concerns a little bit because you're talking about government and non-government. But it follows somewhat the same path, that, okay, just get rid of and restart. But I I've always made somewhat the joke that driving a government is like putting an 18-wheeler on a very, very skinny street, and trying to do a K-turn.

[00:17:41.17] - Dan Paulson

Down to Steve Hill, add that.

[00:17:44.20] - Rich Veltre

Yeah, you can't. It doesn't operate like that. And the effect of everything they do does not take a minute. It requires that you almost plan and plan ahead and then plan again. It just doesn't operate where you can make that a quick adjustment. What are you missing when you make that adjustment?

[00:18:11.26] - Dan Paulson

Well, and I think here's where businesses are going to feel that the most, because I believe we're going to cut too deep, and there are certain departments that aren't going to go away, certain regulations that aren't going to go away. And there are certain businesses that are going to have a need for those government services that are not going to have somebody to go to. And it's either going to delay certain things. I know Trump's going to want to streamline as much regulation as he possibly can. That was never a secret from the get-go. He's going to try to make things easier. So there's fewer regs, and fewer permits, and fewer this and fewer that. But certain things just can't disappear altogether. I think there is some validity for why certain departments or divisions exist. Do they need to be restructured? Most definitely because I think there's been too much public-private mix in certain areas, especially when you look at the FDA or something like that, where a lot of... I was just listening this morning where a lot of the FDA is actually privately funded. Now, you would think that's a definite conflict of interest.

[00:19:16.22] - Dan Paulson

Well, it is. But that's the nature of how things have, I guess, turned around there in the last 30, 40 years. But we're going to be in situations where, again, somebody is going to have a need, either a business or an individual, They're going to go to the government to try and address that deed, and there's going to be nobody on the other end to answer the call, or there's going to be nobody there to deal with the question or address the issue that's going on. And I think that's probably another area beyond the employment side, where we're going to see businesses maybe run into a little bit of a problem with trying to get some things accomplished. Thoughts?

[00:19:55.17] - Rich Veltre

Yeah, I hope that is not the case, but I think you're 100 % on target. I mean, again, I go back and say somewhat the same thing. When they originally announced the Department of Governmental Efficiency, the task was to come back to him in two years.

[00:20:14.19] - Dan Paulson

So Okay.

[00:20:16.11] - Rich Veltre

We're at month two.

[00:20:18.20] - Dan Paulson

Well, Elon never moved slow. I'll give him that.

[00:20:23.10] - Rich Veltre

So again, my concern being, it's an 18-wheeler on a skinny street trying And how are you going to turn that thing around in that short amount of time? It just doesn't make a whole lot of sense. It's like four years ago or three years ago when they said, oh, the IRS is going to hire 80,000 agents. I said, there's not 80,000 accountants available to go and build that opportunity, right?

[00:20:54.15] - Dan Paulson

Right.

[00:20:55.00] - Rich Veltre

Even if people wanted to go work for the IRS. It's 80,000 positions that you're claiming are open. Okay? No. It just doesn't make sense. So I would be happy if people would just turn around and start showing where things make sense.

[00:21:13.00] - Dan Paulson

Yes.

[00:21:13.17] - Rich Veltre

And to your point, it requires the American people to be able to see what's happening. You got biased media, and then you have a President who's basically said, throw out all the media. So now you got two highest media parties that don't actually get any information. So nobody's effective for us. So again, it gets back to, do we need a shake-up? Yes. Is this a good shake-up? Good, I don't know, but it's definitely a shakeup. It's definitely somebody's trying to do something, which is a heck of a lot better than the last eight plus years of nothing happening between pandemic, government stalemate, everybody trying to hold on to their jobs, right?

[00:22:03.26] - Dan Paulson

Well, and that could be the reason why they are trying to move as fast as they are, because you and I know they've got a majority on all counts right now. That's going to change. It's almost guaranteed that within the next two years, when the midterm elections come up, that there'll be a shift, and one or both houses will flip. So I think they're also looking at that saying, well, we need to ram through as much as we can right now while we got the people to promote it. Though it's funny because the Democrats are really good at standing together where the Republicans typically will be more independent on their voting style. Not that I always mind that because you shouldn't just check the box because of the color of your party. But it's going to, to me, that's a big reason why they're pushing so hard on this. They want to get as much accomplished and show as much change as possible early on to try to minimize that risk two years down the road. And also in case something does change, now they've got the people to help push it through where they won't in a couple of years.

[00:23:10.14] - Rich Veltre

Well, I guess I would add to that. Let's think about what Because we all know how Trump is, right?

[00:23:18.28] - Dan Paulson

Yes.

[00:23:20.07] - Rich Veltre

I think you were telling me at one point that his poll numbers are good, but the guy still... I'm sorry, I'm talking about the President of the United States and saying the guy can be a real jerk. Yes. To be as polite as I possibly can on a podcast, he can be a real jerk. So my curiosity was always, if this guy came in with the policies he had and explained to people, this is what I'm doing, at least to a certain extent, as opposed to, well, I'm Trump, so I'm just going to do it. If you explained it a little more, what would happen in the two years when we get to the midterm elections? Do you think maybe more Republicans would get?

[00:23:56.15] - Dan Paulson

Well, I think he does explain it, but he explains it in real time, and he explains it as he's trying to figure it out. And I think that's more of what frustrates a lot of people is he's saying things off the cuff that he's still trying to work through in his head how this is all going to work out. So then you get the sound bite of, oh, well, they're going to do this gloom and doom, world's going to burn. And that's what we end up with. Again, compare the last two parties, we had Biden in previously, and it wasn't transparent at all. You didn't know what was going on until something happened. And then the President usually wasn't there to talk about it. It was a member of his staff, because I don't think the President was all let together there anyway. So we're seeing both extremes. And I think people wanted more of what they're seeing now, because what I do see is there is a lot more accessibility and visibility, with the exception of the recent announcement that, well, we're going to pick and choose who from the media gets to sit in the room with us, because if you're going to do that, well, you're probably going to pick people that are more agreeable with you.

[00:25:07.28] - Dan Paulson

Now you're surrounding yourself with your own yes men, which is just as bad as if you have a completely different situation where you've got media that doesn't agree with you at all, and they're going to do everything they can against you. Don't want to get too far down this rabbit hole, but I think that's what we're seeing here is we are seeing transparency. And because it's not all thought out yet, it becomes very frustrating to the American people, because while they're getting information that's helpful, they're not seeing where this is taking them. And then on top of that, you see, again, well, this department is going away, that department is going away. We're taking everything down to zero. If we need it, we'll bring it back. Okay, fine. At some point, we've got to have a plan for some of this stuff because there are programs that are needed, and you can't just cut everything down to zero. As much as you'd like to, there still has to be stuff there that support the common good of the people. And we'll see how all that shakes out.

[00:26:13.17] - Rich Veltre

Yeah.

[00:26:13.23] - Dan Paulson

So I think Yeah, go ahead. No, go ahead.

[00:26:18.02] - Rich Veltre

No, I was just... It's funny how politics works, how it comes into play, right? Because I start a company and I want to run it for a long time. President's He's only in for four years, then he's got to be elected again.

[00:26:33.06] - Dan Paulson

Right? Right. And this one can't.

[00:26:35.07] - Rich Veltre

He can't be elected again. So realistically, when he got elected, I think there were a lot of people who basically said, well, he needs to be working towards getting the next guy in, to carry the torch. Because if it's just going to be another, well, in four years, we'll just vote the other guy back in, and then it goes back the other way. And then the the next four years, we elect another guy, and it goes back this way. Totally inefficient, doesn't get anywhere anytime soon, and it just is a wreck. So if the American people are happy that this is where it's going, or this is where we think that it's going, then you want somebody to carry that torch to be able to do another four years and actually get something done. I think it would be interesting if that If that was the narrative, if that was the discussion, then this is what he's doing, and this is why it's important to continue. But I'm not seeing that. I see the opportunity for the device decisiveness to come back. It's just a question of when. It's just a question of when.

[00:27:50.26] - Dan Paulson

Yeah. We will have to wait and see. I mean, right now, it would almost be interesting to come back in June Yes. That's what three, four months from now, say what's changed then. Because really, that's going to be where we will really start seeing the rubber hitting the road and get an understanding of, were all these cuts helpful? Did they actually take us the right direction? What are they doing with the money they are saving? And how is that going to apply to cutting down the deficit? Because I think for the common American person that understands the fiscal side of things, that's what they're looking at They want to see that some plan to cut that deficit down, not to see the money reallocated towards another program or more towards defense, which I have heard Trump say is that we have to grow our defense budget more. Okay, Okay. And why? Because you're the accountant. How many times has the Defense Department passed a budget or passed their audit in the last nine years?

[00:28:55.08] - Rich Veltre

Never.

[00:28:55.21] - Dan Paulson

Zero. Never. So there's going to be a lot of- They spend a dollar, they spend 10. Yes. This is why we have $400 hammers and $1,000 toilet seats, because that's just the way things work. But as we look at business side of things, and as we look at what could happen here in the next couple of months, I think as we summarize this, what I see is businesses are probably going to be very cautious on hiring anyone outright. From our side of things, there's going to be more fractional people potentially entering the market or more consultants or more coaches, whatever you want to call them. There's going to be more people hanging their own shingle, which is then going to flood that market for a period of time, just like it has in previous recessions when people became unemployed because they have to do something. And on the other side of it, I think there's going to be government services that are now going to be much more difficult to use. They're not going to go away, but you're now going to have a tougher time answering those questions or getting those needs handled than you did maybe nine months ago.

[00:30:02.00] - Dan Paulson

What's your thoughts?

[00:30:03.22] - Rich Veltre

Yeah, I think of the IRS every single time, and I'm like, they're going to go in there, they're going to slash that budget. The IRS is impossible to work with as it is.

[00:30:14.21] - Dan Paulson

Yes. I heard someone tell me- Well, they could eliminate it. Just putting that thought out there.

[00:30:21.03] - Rich Veltre

I was hopeful we wouldn't go there.

[00:30:25.25] - Dan Paulson

That's a discussion for another day. We'll just leave it. Yeah.

[00:30:29.27] - Rich Veltre

I don't see that one. I don't see that one going away. Just like we were supposed to get a postcard, be able to do all our taxes on a postcard. It didn't really happen.

[00:30:41.14] - Dan Paulson

It made it worse. It made it more complicated.

[00:30:43.24] - Rich Veltre

Yeah, I can't think But I can't think that that's something that's actually a possibility. So I don't think the IRS is going away. But if you slash the budget and you slash the people, there's fewer people answering that phone. And somebody told me the other day, they spent 12 hours on hold trying to get a question answered. I'm like, how do you bill your client for 12 hours sitting on hold? No kidding. Yes. You can't.

[00:31:10.29] - Dan Paulson

Yes. That is going to be a problem. And that has been a problem for at least the last decade. I know that. So here we are. Accounts get more billable time because they can't get a hold of anyone at the IRS. That's our summary for this episode. That's it. All right, good. Well, Rich, this has been We should tell people to like, share, and subscribe this. We always forget to do that. But yes, like, share, and describe this. Follow us on Books and the Biz, or Books and Biz, so you can follow us on LinkedIn, YouTube, Facebook, all the above. And we would love to hear your thoughts on all this. So leave it in the comments and let us know what you think. Rich, until next week, we shall move on and see what else Doge cuts.

[00:31:58.05] - Rich Veltre

Sounds good.

[00:32:00.28] - Dan Paulson

All right. Take care.

[00:32:02.09] - Bob

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