“I’m going to cut the US government budget first.” Musk cuts Twitter-style… Cuts while looking at Excel for 6 hours

[블록미디어 이제인 기자] The New York Times (NYT) reported on the 16th (local time) that Elon Musk, who was in charge of the Department of Government Efficiency DOGE under the Trump administration, is expected to apply the same cost-cutting strategy he applied to his own companies to government agencies. .

Musk has emphasized efficiency through thorough cost reduction at Tesla, SpaceX, and Twitter (now X). He is expected to drastically cut the US federal budget.

# Twitter expenses reduced by looking at Excel for 6 hours

In December 2022, six weeks after acquiring Twitter, Elon Musk held a marathon meeting to review the company’s financial situation. At this position, he reviewed the company’s spending items line by line for six hours and boldly cut unnecessary expenses.

Perks such as car service that some high-ranking executives used were also eliminated, and employees in charge of unnecessary contracts were fired. This method is similar to Tesla and SpaceX, and has led to cost savings for the companies.

Although Musk’s strategy emphasizes efficiency, it has also been criticized for sometimes causing confusion in product safety and operations. In the case of Tesla, it introduced a method of using only cameras, excluding expensive radar sensors, in its autonomous driving technology, but accidents and lawsuits continue as a result.

# Maximize efficiency

Musk’s approach has also produced positive results. Space

Musk is currently planning to apply this cost-saving strategy to the federal government. President-elect Donald Trump appointed Musk as head of the new government efficiency department and predicted major budget cuts.

# 400 government agencies reduced to 99

Musk presented a goal of reducing the annual budget by $2 trillion, emphasizing the need to reduce more than 400 government agencies to 99.

The impact of Musk’s extreme cost-cutting measures on the government level is expected to be a major concern in the future. There is active discussion about whether his philosophy, which has been called an icon of efficiency, will work in the federal government, or whether it will lead to side effects.

# Real examples of cost savings

1. Tesla
– Radar sensor removal
Tesla removed expensive radar sensors from its autonomous driving technology and introduced a method of using only inexpensive cameras.
– Cost: Camera price is less than 1/5 of radar sensor.
– Problem: Increased accidents and lawsuits, ongoing investigations by regulators.

– Reduction in office welfare
When the Model
– Savings: Thousands of dollars in monthly savings.

2. SpaceX
– Self-manufactured rocket parts
We manufacture our own inexpensive parts on behalf of existing aerospace industry suppliers.
– Example: Replacing fuel tanks with technology used in trucks and the oil industry.
– Savings: Existing costs of over $1 million → reduced to hundreds of thousands of dollars.

– Supplier negotiation and substitution
If a supplier offers a high price for a part, negotiate or switch to in-house production.
– Example: Asking for a part from $100,000 to $10,000.
– Result: termination of business with some suppliers, replaced by in-house production.

3. Twitter (now X)
– Large-scale workforce reduction
More than 75% of employees were laid off after acquisition.
– Size: Reduced from 8,000 → 1,500.
– Goal: Reduce the cost of paying salaries and bonuses.
– Result: Some confusion occurred due to lack of knowledge of company operations.

– Data center closure
Data center closed due to high rent.
– Case: California data center closure on Christmas Eve 2022.
– Issue: Temporary suspension of illegal activity monitoring tool, resulting in service outage.
– Savings: Over $100 million in annual cost savings.

– Minor cost savings
A shortage of toilet supplies occurred due to the termination of the cleaning service contract.
– Case: Employees brought toilet paper directly to the bathroom.

4. Early business case
– Start a business with minimal living expenses
When starting your first business (Zip2), save money by staying in the office.
– Example: Saving on housing costs by showering at a YMCA near the office.

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