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A federal judge has temporarily halted the U.S. State Department’s plan to lay off nearly 2,000 employees as part of a sweeping reorganization. U.S. District Judge Susan Illston ruled from San Francisco on Friday that the department's restructuring is subject to her earlier injunction barring federal agencies from implementing mass layoffs ordered by former President Donald Trump.
The State Department had claimed its plan, submitted to Congress in April, was independent of Trump’s February executive order. However, Judge Illston found that key documents—including the department’s budget proposal—directly referenced the order, placing it within the scope of her original ruling. “If things proceed consistent with that executive order… they are barred,” she said.
The ruling came during a lawsuit filed by unions, nonprofits, and municipalities opposing Trump’s directive to overhaul federal agencies. Illston previously blocked 20 federal agencies from moving forward with downsizing plans pending the case’s outcome. The Department of Justice, defending the State Department, said layoff notices scheduled for Saturday would be paused.
The agency has stated that its restructuring plan aims to streamline over 300 offices by July 1, but has not commented on how the lawsuit might affect that timeline. Deputy chief of staff Daniel Holler claimed the initiative was led by Secretary of State Marco Rubio and wrongly included references to Trump’s order.
Judge Illston reiterated that federal restructuring must have Congressional approval. The Trump administration has appealed her ruling to the Supreme Court.
The case marks a significant legal challenge to executive overreach and federal employee rights, especially amid the controversial involvement of Elon Musk, who had supported the overhaul but has since distanced himself from Trump. The situation remains fluid as legal proceedings continue.
