CFPB Mass Layoffs Paused as Emails Show Rush to Fire Staff (1)

A federal appeals court restored a temporary pause on mass firings at the Consumer Financial Protection Bureau, as internal emails show agency leaders raced to terminate 90% of workers earlier this month after the appellate panel previously allowed the layoff process to move ahead.

CFPB officials including Chief Legal Officer Mark Paoletta, Chief Operating Officer Adam Martinez, and human resources personnel worked with Department of Government Efficiency detailees this month to wind down large swaths of agency operations, scrambling to determine minimum staffing to perform basic functions, according to messages filed Monday and over the weekend with a lower court weighing the Trump administration’s shutdown moves.

The bid to eliminate most of the CFPB’s staff came after a three-judge panel on the US Court of Appeals for the District of Columbia Circuit on April 11 narrowed a preliminary injunction from the lower court, allowing reductions in force to proceed if the CFPB conducted a “particularized assessment.”

But the CFPB’s latest RIF move exceeds a previous mass layoff plan that prompted the preliminary injunction from Judge Amy Berman Jackson in the US District Court for the District of Columbia, the appeals panel said in a Monday order. The panel removed the “particularized assessment” language and restored the job protections from Jackson’s initial order, while both courts weigh a challenge to the administration’s moves.

The majority ruling from the appeals panel also clarified that a “particularized assessment” means a CFPB official responsible for the RIF must determine that each division or office can perform statutorily required duties without the employees slated for termination.

Judge Neomi Rao dissented, arguing that the panel shouldn’t bar CFPB leadership from reducing the agency’s workforce and should continue its stay on Jackson’s injunction pending the outcome of the appeal. Jackson overstepped the appeals court’s stay by renewing her ban on RIFs, and instead of finding a remedy, the latest D.C. Circuit order “hamstrings the Executive and prevents the CFPB from downsizing until the merits of the appeal are resolved,” Rao said in her dissent.

Jackson halted the latest planned job cuts on April 18 while she weighs whether they violated her March 28 injunction.

RIF First, ‘Major Adjustments’ Next

Internal messages filed in recent days show CFPB leadership immediately responded to the appeals court’s initial stay by compiling lists of staff to target with more than 1,400 RIF notices, at the urging of Martinez and DOGE detailee Gavin Kliger.

“Adam is having a nervous breakdown,” said Nikki DiPalma, the CFPB’s human capital operations and systems lead, in a Microsoft Teams message filed with Jackson’s court. “It’s awful, Adam is yelling at me because Gavin is yelling at him…I told Adam to just have Gavin take it over since he is so unhappy with the team.”

Determining which federal workers to keep at the agency raised several operational questions among CFPB leadership, prompting rapid-fire exchanges on which roles would be key to keep certain divisions and systems running after the layoffs.

Several emails discussed a target number of 485 remaining CFPB workers as late as April 15, just two days before RIF notices went out to as many as 1,483 of the agency’s staff members, which would’ve left just over 200 employees remaining.

“I don’t think we can keep operating even for 60-days without keeping many of these folks,” said Christopher Chilbert, the agency’s chief information officer, in an email providing employee names to Martinez on the day the RIF notices were sent out. “This is my quick pass. I may come up with others.”

Martinez agreed with Chilbert’s list of workers deemed necessary to keep on staff, comprising mainly information technology personnel with knowledge of how to keep the agency’s computer systems running.

“We will really need to spend the next week figuring out a path forward,” Martinez said in his email response. “All OPS components are going to need major adjustments to the way we do business and what we are able to deliver.”

Another email sent on April 14 by Julia McLung, the CFPB’s talent management director, mentioned 134 positions in operations that were deemed “essential” through a “wind down,” and 22 additional roles deemed “long term essential” after the so-called wind down period.

Several CFPB units would have been unable to fulfill congressionally mandated tasks such as running a consumer complaint database if the latest RIF took effect, according to declarations from nearly 20 employees submitted by the National Treasury Employees Union, which represents many agency staff members. Many divisions weren’t consulted on the proposed cuts, the employees said.

‘Running on Low Fuel’

The time crunch to carry out the RIF process after the appeals panel placed a stay on key parts of Jackson’s injunction also presented obstacles and stretched staff thin to complete the task at hand, according to emails and messages filed with Jackson’s court.

The union and its co-plaintiffs argued in a filing that the emails show how little CFPB leadership knows about the statutory duties of the agency, highlighting a paragraph sent by Trump administration attorney Victoria Dorfman that seemed to be copied from the top Google result when researching the CFPB’s founding statute.

After RIF notices were sent out on April 17, the DOGE and CFPB staff members who managed the process were still looking to adjust who was terminated based on stated goals and operational concerns, according to documents posted Monday.

Jackson’s swift response the day after the RIF notices were sent out temporarily halted the firings, and she raised the possibility in her April 18 order that CFPB leadership had spent the days after the appeal court’s narrowing of her previous injunction “dressing their RIF in new clothes” before sending it out to employees.

“We are three positions off, but we are reconciling it. I apologize,” Martinez said in an email to Paoletta and Daniel Shapiro, deputy chief legal officer, after RIF notices had been sent. “My team doing all of the number/name crunching are running on low fuel and have not slept for a couple of days. They also happen to be RIFing themselves.”

Judges Gregory G. Katsas and Cornelia T.L. Pillard also sat on the D.C. Circuit panel, which is set to hear additional oral arguments on May 16.

Gupta Wessler LLP and Public Citizen Litigation Group represent the union and its co-plaintiffs.

The cases are NTEU v. Vought, D.C. Cir., No. 25-05091, 4/28/25 and NTEU v. Vought, D.D.C., No. 1:25-cv-00381, exhibits filed 4/28/25.