The Musk Deputy Running DOGE’s Huge Cost-Cutting Drive

WASHINGTON—When Elon Musk took over Twitter in 2022, one of his key executives was so intent on reducing costs that a former employee recalled him questioning janitorial expenses at an Atlanta data center.

That executive was Steve Davis, a leader at Musk’s Boring Co., who aggressively slashed expenditures, pressured vendors, and swiftly restructured Twitter’s workforce, former employees reported. His rapid and disruptive approach led to confusion and turmoil within the company.

Now, the cost-cutting strategies that reshaped Twitter are being applied to the federal government, where Davis is overseeing Musk’s Department of Government Efficiency (DOGE). Federal agencies across Washington are experiencing anxiety as Musk follows through on President Trump’s campaign promise to reduce government spending.

Trump-appointed U.S. Attorney for Washington, D.C., Ed Martin, expressed support for Musk and Davis in a letter posted on X, stating, “If people have broken the law or acted unethically, we will investigate them and hold them accountable.”

DOGE has gained access to multiple government agencies, including the U.S. Agency for International Development (USAID), the Treasury Department, and the agency overseeing Medicare and Medicaid. DOGE staffers have already accessed the Treasury’s payments system, searching for inefficiencies. Tom Krause, a DOGE official, now serves as the Treasury’s fiscal assistant secretary, according to the department’s website.

A federal judge in New York temporarily restricted DOGE’s access to the Treasury’s payment system, with Judge Paul Engelmayer setting a hearing for Friday.

The most dramatic effects of DOGE’s efforts have been felt at USAID, a 10,000-person agency managing $40 billion in foreign aid. Davis and Musk are leading the charge in restructuring the agency, according to a USAID official. Davis regularly coordinates with Peter Marocco, who is overseeing USAID’s transition under the State Department’s supervision.

Davis’s rise within DOGE was unsurprising to those familiar with Musk’s leadership. When Musk acquired Twitter, Davis played a major role across various departments, influencing product development, procurement, and personnel decisions.

His commitment to cost-cutting was well-documented. In exhibits from a 2023 lawsuit filed by former Twitter employees, Davis participated in discussions about expense reductions. One email had the subject line “Daily Savings Email-Draft: Nov. 10, 2022.” Another was labeled “Mistaken RIF” (Reduction in Force).

According to the lawsuit, Davis was determined to execute deep budget cuts to align with Musk’s directives. In a 2022 meeting, he declared that Twitter would cease using brokers to negotiate property leases, responding to concerns by saying, “Elon wants this.”

When Twitter’s then-vice president of real estate, Tracy Hawkins, was tasked with finding $500 million in savings, she warned of financial risks associated with breaking leases. Davis dismissed those concerns, reportedly stating, “We just won’t pay landlords.”

His disregard for regulations was further illustrated when a Twitter employee mentioned that a permit was needed to install a private bathroom near Musk’s office. Davis allegedly responded, “We don’t do that; we don’t have to follow those rules.”

Former employees described his approach as highly detail-oriented, with Davis scrutinizing costs down to the price per square foot of rental agreements and service contracts. A common tactic was delaying vendor payments to pressure companies into renegotiating contracts under more favorable terms for Twitter.

Davis, a dedicated follower of Ayn Rand, holds aerospace engineering degrees from the University of Pennsylvania and Stanford. He was among SpaceX’s earliest hires and has worked closely with Musk for over two decades.

During his first stint in Washington, Davis was simultaneously employed at SpaceX and pursuing a doctorate in economics at George Mason University in 2008 when he noticed a lack of frozen yogurt options in the district. He launched a shop, Mr. Yogato, which quickly gained a cult following thanks to its unconventional discount system—singing along to the 1980s hit “Mr. Roboto” earned customers 10% off, and besting Davis in trivia about “Seinfeld” or Nicolas Cage’s film “The Rock” also secured a discount.

In a 2015 interview, Davis recounted how his career trajectory was unexpectedly shaped by Hollywood. As a business undergraduate, he was inspired by the 1998 film “Armageddon” to pursue aerospace engineering, eventually leading him to SpaceX.

“In conclusion, my entire life path was redirected by a Bruce Willis movie,” Davis said.