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The leader of a major government union outlines their strategy to battle Trump federal cuts—And says Elon Musk has ‘no clue’ about workers
The second Trump administration has been characterized in large part by a focused effort to cut down the number of federal employees.
Through the Office of Personnel Management and Elon Musk’s Department of Government Efficiency, the president has used highly unusual resignation offers and layoffs to shrink the workforce across agencies including the Department of Education and the Department of Veterans Affairs. There’s no official number on how many people have been laid off, but 62,530 government positions have been cut so far this year, according to data published earlier this month from global outplacement firm Challenger, Gray, & Christmas. There are likely more cuts to come.
Unions have played a major role in legal challenges to the mass firing of federal workers. On Thursday, two separate rulings came down ordering the Trump administration to reinstate these terminated employees. One ruling in response to 20 Democrat attorneys general calling for the reinstatement of fired workers came from a federal judge in Maryland. The other was issued by a judge in the U.S. District Court for the Northern District of California in response to a case brought by dozens of labor unions and advocacy groups. U.S. District Judge William Alsup ordered that six federal agencies reinstate thousands of probationary employees that were fired under the guidance of OPM, a move he declared illegal. The Trump administration has already filed an appeal in that case.
The American Federation of State, County, and Municipal Employees (AFSCME) was one of the plaintiffs in that second challenge. The union represents 1.4 million public service workers across the country in federal, state, and local government, as well as the nonprofit sector. AFSCME’s president, Lee Saunders, spoke with Fortune about the threat that public sector workers are under, what his members are feeling, and how the union plans to fight back.
This interview has been edited and condensed for clarity.
Fortune: What are AFSCME members feeling right now?
President Saunders: They’re feeling under attack. They believe in the importance of public services, and yet you see them being attacked every single day by this current administration.
They’re frightened, but they also know that they’ve got to make their voices heard and they’ve got to fight back, and that’s exactly what they’re doing. Their union is supporting them 100% by talking about the importance of public service, and challenging some of the things that this administration is doing, and whether it’s in the courts, or whether it’s in the media, or whether it’s on the streets. We’re going to continue to do that to make our point and get our point across.
AFSCME is one of the plaintiffs in the case which was just ruled in favor of reinstating fired probationary federal workers. Many are seeing this as a win for federal workers, but that ruling does not affect this week’s deadline set by the Trump administration requiring all agencies to send the president and the OPM plans for more layoffs. What could the future look like for these workers?
This is a huge victory for these workers.
It will be challenged, but we’re going to continue to put the full force of the union behind filing these kinds of lawsuits. That’s really important, but we’ve also got to go on offense and not play defense all the time, and we’re going to continue to do that. What we’re doing right now is organizing and mobilizing and educating our members across the country by having phone calls, by going to town hall meetings.
One of the things that we’ve got to do is continue to organize. Seventy percent of Americans believe that unions are absolutely necessary in this country and 88% of young people [view them favorably]. We’re going to spend resources, and we’re going to be talking to workers, asking them to be represented by us or other unions so they have a seat at the table.
It feels like every day there is a new development related to the DOGE layoffs. How would you advise people to keep track of the whirlwind of actions?
I think it’s up to AFSCME and the labor movement and our allies and friends to continue to talk about what this administration is trying to do to hurt working people. We’ve got to enlist people within the labor movement and outside the labor movement to make their voices heard. We cannot just sit idly by and be silent when this destruction—and that’s exactly what this is—is taking place at the federal level, [which will] roll down to the state and local level, with possible huge cuts in federal programs. State governments rely on federal money to fund programs at the state level; they get about 33% of [their revenue] from the federal government. That helps provide public services at the state, city, and local level.
It’s all about continuing to educate. It’s all about asking [workers] to not be silent, but to make their voices heard and to fight back like never before.
[When asked for comment, a spokesperson for the White House told Fortune: “President Trump returned to Washington with a mandate from the American people to bring about unprecedented change in our federal government to uproot waste, fraud, and abuse.”]
Elon Musk reposted a Tweet implying that public sector workers were responsible for mass murders under people like Hitler, Mao and Stalin. What do you make of this comment, and the attacks on public sector workers generally?
I will try to control my language, but… it is a hateful comment for him to [retweet] that and compare our public sector workers and our members saying that “Hitler, Stalin and Mao didn’t murder millions, but [their] public sector service workers did.” Now just think about that. That’s where he’s coming from, and we’ve got to get that message out.
He has no clue what workers are faced with every single day. He has no clue what they do to improve the lives of our citizens in our communities across the country and to improve upon public services, yet he makes a statement like that. I mean, it is unbelievable, and we’ve got to make sure that people understand that this is what he is saying, and this is what folks in this administration believe.
[Fortune reached out to Elon Musk but did not get a response.]
How can unions protect workers if the government wants to fire them?
We’re filing these lawsuits—that’s number one. We are pushing even though we understand that the climate here in Washington, D.C. is not the best. But we’ve still got to continue to go on the offense, as I said earlier. We are supporting the PRO Act, which would give workers the right to have a seat at the table to improve labor labor law in this country. We’re doing the same thing with the Public Freedom to Negotiate Act for public service workers.
We have the ability to mobilize every single day—to mobilize union members, but also workers who aren’t in unions in our communities across the country. Because this is impacting them too. The actions that are being proposed have an impact on everyone that relies upon public services: Medicaid, Medicare, Social Security. All of these programs are under attack, and we’ve got to do what we do best, and that’s exactly what we are doing.
This narrative against public sector workers has come on quickly and strongly. How do you combat the sentiments coming from those with huge platforms like Trump and Musk?
It’s not only federal workers. It really is all workers. There’s an attack on all workers right now. I guess the way that I can answer that question is that reality is now hitting people in the face. I mean, they’re feeling it. People are being laid off indiscriminately. People are being fired. Their rights are being taken away from them. Services that the American people relied upon are being cut, and they’re proposing to do a lot more damage. So I mean, here’s the playbook that they talked about, and now they’re putting in an action, and we’ve got to make sure that people understand the impact that it’s going to have on them and their families. You’ve got to react to it in a way where we ask people to fight back and to make their voices heard. You cannot sit by silently and watch this happen.
This story was originally featured on Fortune.com
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Wall Street’s recession odds are starting to look like a coin flip as Trump refuses to back down on his trade war
- Wall Street is raising the probability that the US economy will slip into a recession, with some economists seeing 50-50 odds. That’s as President Donald Trump shows no signs of backing down on his aggressive tariff plans, including reciprocal duties set to take effect in a few weeks.
The likelihood that the US economy will slip into a recession is rising on Wall Street, with some economists even seeing 50-50 odds.
JPMorgan chief economist Bruce Kasman told reporters in Singapore on Wednesday that he now sees a roughly 40% recession risk, up from about 30% at the start of the year.
But he added that recession odds would rise to 50% or above if President Donald Trump’s planned reciprocal tariffs, which are due to take effect April 2, meaningfully come in to force.
“If we would continue down this road of what would be more disruptive, business-unfriendly policies, I think the risks on that recession front would go up,” Kasman said.
Meanwhile, former Treasury Secretary Larry Summers warned that the chances of a recession are about 50%, citing Trump’s tariffs, immigration crackdown, and mass federal layoffs, which are combining to cause sharp reductions in consumer and business spending plans.
When economic forecasts start being revised in a certain direction, there tends to be momentum, he told Bloomberg TV on Tuesday. And all the revisions are going toward less growth.
“I think we’ve got a real uncertainty problem,” Summers added. “I think it’s going to be hard to fix that. And we’re looking at a slowdown relative to what was forecast almost for sure and serious near-50% prospect of recession.”
Moody’s Analytics chief economist Mark Zandi raised his recession odds to 35% from 15% at the start of the, citing tariffs.
But if Trump follows through with his tariff plans and stays there for more than a few months, that would be enough to push the economy into recession, he told Bloomberg TV on Wednesday.
For now, he has hope that negotiations will lead to tariffs getting reeled back in, which is keeping his forecast below 50%.
“But I don’t say that with any confidence with each passing day,” Zandi said. “And of course, the uncertainty around all of this is doing damage.”
In fact, surveys of consumers and businesses show that they are turning increasingly gloomy about the economy amid tariff uncertainty and mass federal layoffs. Even executives in deep-red states that voted for Trump say seeing business conditions are collapsing.
Elsewhere on Wall Street, recession probabilities aren’t as high, but they are rising sharply. Market gurus Ed Yardeni and Eric Wallerstein said earlier this month that they see odds of a bear market and a tariff-induced recession at 35%, up from 20%.
And Allianz chief economic advisor Mohamed El-Erian lifted his recession probability to 25%-30% from 10% at the beginning of the year.
Treasury Secretary Scott Bessent was asked on NBC’s Meet the Press on Sunday if he could guarantee there won’t be a recession, and he replied that there are no guarantees, adding that his earlier comment of an economic adjustment doesn’t mean there has to be a recession.
“But I can tell you that if we kept on this track, what I could guarantee is we would have had a financial crisis,” he said. “I’ve studied it. I’ve taught it. And if we had kept up at these spending levels, that everything was unsustainable. So we are resetting and we are putting things on a sustainable path.”
For his part, Trump last weekend refused to rule out a recession, causing stocks to dive, then said days later that he doesn’t see one coming. But Trump isn’t budging on his trade policies, saying Thursday that “I’m not going to bend at all.”
And when asked about the sharp dive in approval in a recent CNN poll on how Americans view Trump’s handling of the economy, the White House defended his economic plans and pointed to his record during his first term.
“Since President Trump was elected, industry leaders have responded to President Trump’s America First economic agenda of tariffs, deregulation, and the unleashing of American energy with trillions in investment commitments that will create thousands of new jobs,” spokesman Kush Desai said in a statement. “President Trump delivered historic job, wage, and investment growth in his first term, and is set to do so again in his second term.”
This story was originally featured on Fortune.com
Baidu Inc. released a new artificial intelligence model that articulates its reasoning, in an apparent bid to regain momentum against up-and-coming rivals like DeepSeek.
The Ernie X1 model by China’s internet search leader works similarly to DeepSeek R1 — which shocked Silicon Valley by offering comparable performance to the world’s best chatbots at a fraction of their development cost. Baidu’s reasoning model excels in areas like daily dialogs, complex calculations and logical deduction, it said in a statement Sunday.
Baidu also upgraded its flagship foundation model to Ernie 4.5. It immediately made all tiers of its service — including the X1 model — free for its chatbot users, several weeks than earlier previously planned.
The Beijing-based company was the first in China’s trillion-dollar tech sector to launch a chatbot modeled after OpenAI’s ChatGPT, but rival chatbots from ByteDance Ltd. and Moonshot AI soon took over in popularity. Open-sourced models like Alibaba’s Qwen and then DeepSeek gained greater recognition within the global developer community.
Ernie 4.5 outperforms OpenAI’s latest GPT 4.5 in text generation, Baidu said, citing several industry benchmarks.
Baidu has declared that it will make Ernie AI models open-source from June 30, representing a major strategic shift after the rise of DeepSeek. It also integrated the R1 model into its search engine — its bread-and-butter business.
The generative AI boom showed up in Baidu’s December-quarter results via a 26% jump in cloud revenue. That rise, driven by services provided to developers chasing computing power, was overshadowed by weak advertising sales amid China’s economic malaise.
Baidu concluded last month a drawn-out deal to acquire the YY Live streaming platform Joyy Inc. The $2.1 billion takeover released some $1.6 billion that Baidu previously deposited into escrow accounts, which it plans to invest into AI and cloud infrastructure.
This story was originally featured on Fortune.com
China will take steps to revive consumption by boosting people’s incomes, the official Xinhua News Agency reported on Sunday, citing a statement from the State Council.
Other measures include stabilizing the stock and real estate markets, and offering incentives to raise the country’s birth rate, as the government tries to ease the deflationary pressures afflicting the economy.
Beijing will promote “reasonable growth” in wages and establish a sound mechanism for adjusting the minimum wage, Xinhua reported. It will also look at setting up a childcare subsidy system, as well as strengthening how investment can support consumption.
Read More: Why China Is Struggling to Escape Cycle of Deflation: QuickTake
Invigorating consumption has been a challenge for the government since the end of the pandemic. Retail sales have been anemic while consumer prices fell into deflation in February for the first time in over a year.
At annual parliamentary meetings this month, the country’s leadership made boosting consumption their top priority for the first time since President Xi Jinping came to power over a decade ago.
Chinese stocks rallied the most in two months on Friday after the State Council, China’s cabinet, announced that officials from the finance ministry, the central bank and other government departments plan to hold a press conference Monday on measures to boost consumption.
Other highlights of the plan:
- Enlarge variety of bond-related products suitable for individual investors
- Adopt multiple measures to promote increase in farm incomes
- Raise financial help for some students
- Appropriately increase the basic pension for retirees
- Ensure timely and full distribution of unemployment benefits
- Support tourist attractions in expanding services and the reasonable extension of business hours
- Support opening of duty-free shops in cities where conditions permit
- Boost support for trade-in programs
- Lower the interest rate on housing provident fund loans at an appropriate time
- Scale back restrictions on consumption in an orderly manner
- Accelerate the development of new technologies and products such as smart wearables and autonomous driving
This story was originally featured on Fortune.com
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