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An aerial of the Centers for Medicare & Medicaid Services building on March 19, 2025 in Woodlawn, Maryland. 

Kayla Bartkowski | Getty Images

The Centers for Medicare & Medicaid Services has slashed jobs from its minority health office and other divisions, CNBC has learned, as Robert F. Kennedy Jr. upends the U.S. health department. 

During a virtual all-hands meeting with employees on Friday, CMS acting Administrator Stephanie Carlton detailed some of the specific offices at the agency impacted by cuts under Kennedy’s broader plan to restructure the Department of Health and Human Services, or HHS.

CNBC viewed a transcript of the internal meeting, which was the first at CMS since HHS employees began to receive notifications Tuesday about whether they had lost their jobs as part of the cuts.

Kennedy’s plan involves slashing 10,000 jobs at HHS, including just 300 at CMS but far greater numbers at other agencies. CMS oversees health insurance programs for 160 million Americans, along with other vital healthcare functions — and the Trump administration has tried to downplay the effects its cuts to government spending will have on the popular Medicare program.

But Kennedy said Thursday that some personnel and programs at different federal agencies affected by his sweeping reductions will be reinstated “because we’ll make mistakes.”

Carlton on Friday did not indicate whether any CMS employees will get reinstated, but said “we do think that painful part of [the cuts] that affects people we care about is finished.” 

“I don’t want to make promises that nothing will ever happen, but these are definitely the ones I’m aware of,” she told workers, referring to the cuts at the agency. She said the layoffs were not easy, but emphasized that CMS leadership had to balance the agency’s mission with achieving efficiency across HHS. 

She added that Dr. Mehmet Oz’s paperwork should be completed later on Friday, a day after he was confirmed by the Senate to run CMS. Oz, a celebrity TV host and former U.S. Senate candidate, would like to hold another all-hands call on Monday, Carlton said. Once called “America’s Doctor,” Oz is now more known for dubious promotion of supplements and hormones unsupported by scientific evidence.

The job cuts across HHS are in addition to about 10,000 employees who opted to leave the department since President Donald Trump took office, through voluntary separation offers. Combined, they will lead to the federal health department shedding about a quarter of its workforce, shrinking it to 62,000 employees.

Kennedy’s restructuring comes as the U.S. grapples with one of the worst measles outbreaks in more than two decades, and as bird flu spreads in wild birds worldwide and is causing outbreaks in poultry and U.S. dairy cows, with several recent human cases. The U.S. Food and Drug Administration is suspending efforts to improve its bird flu testing of milk, cheese and pet food due to massive staff cuts at the agency, Reuters reported on Thursday.

CMS did not immediately respond to a request for comment.

The programs cut at CMS

She said the office of minority health was affected by the cuts. The segment works with local and federal partners to eliminate health disparities and improve health outcomes for people from all minority populations, according to the CMS website. It conducts research and analyses to develop new solutions for lowering costs, preventing diseases and reducing the incidence and severity of chronic diseases in the U.S. 

The office was authorized by the Affordable Care Act more than a decade ago, so shuttering it entirely may be against the law. It appears to be among the victims of the Trump administration’s ideological campaign against diversity, equity and inclusion, or DEI, initiatives.

CMS understands that it needs to continue fulfilling the responsibilities of that office under statutory law, Carlton noted. She said CMS will appoint a new office of minority health director.

But she did not explicitly say whether the current director of the office, Dr. Martin Mendoza, had stepped down or was impacted by the cuts.

But “probably the biggest group that was affected” was the Office of Program Operations & Local Engagement, Carlton said. That office is responsible for implementing and overseeing Medicare and Medicaid programs and engaging with stakeholders at the local level. Carlton said the cuts there tried to target areas where there were several divisions with a “similar mission.”

An office responsible for managing the agency’s grants and contracts was impacted, and so was the Medicare-Medicaid Coordination Office, Carlton added. The latter serves people dually eligible for Medicare and Medicaid, developing models to improve the coordination of care for them.

Some of that work will be picked up by others in CMS or from outside the agency, Carlton said. 

She noted that CMS will retain in-house teams that handle communication, human resources and information technology. The agency’s IT team was not affected at all “because of the sensitivity of many of our data sets,” Carlton said.

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The production line for the Boeing P-8 Poseidon maritime patrol aircraft is pictured at Boeing’s 737 factory in Renton, Washington, November 18, 2021.

Jason Redmond | Reuters

President Donald Trump’s sweeping tariffs are set to drive up the cost of Boeing and Airbus planes, GE Aerospace engines, and hundreds of other aerospace and defense products, threatening an industry that helps soften the U.S. trade deficit by more than $100 billion a year.

“It certainly makes things more expensive for the industry,” Dak Hardwick, vice president of international affairs at the Aerospace Industries Association, which represents Boeing, GE Aerospace, Airbus and dozens of other aerospace and defense companies, said of the tariffs.

The industry group said it is asking the Trump administration to uphold provisions in a nearly half-century old trade agreement that allows for duty-free trade of civilian aircraft and imports tied to defense and national security.

“The line is certainly long” for requests to the White House, Hardwick said.

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Trump’s executive order announcing the tariffs said trade and economic policies around the world have exacerbated a decline in overall U.S. manufacturing.

Regarding innovation in the defense sector, the order stated, “If the United States wishes to maintain an effective security umbrella to defend its citizens and homeland, as well as for its allies and partners, it needs to have a large upstream manufacturing and goods-producing ecosystem to manufacture these products without undue reliance on imports for key inputs.”

The aerospace industry has long been a top exporter for the United States. At Boeing alone, more than two-thirds of its airplane orders over the past decade came from customers outside of the United States, according to company data.

“Free trade is very important to us,” Boeing CEO Kelly Ortberg said at a Senate hearing Wednesday. “We really are the ideal kind of an export company where we’re outselling internationally. It’s creating U.S. jobs, long-term high value U.S. jobs. So it’s important that we continue to have access to that market and that we don’t get in a situation where certain markets become closed to us.”

President and CEO of Boeing Kelly Ortberg testifies before the Senate Commerce, Science, and Transportation Committee in the Dirksen Senate Office Building on April 02, 2025 in Washington, DC. 

Win Mcnamee | Getty Images News | Getty Images

The industry has mostly bought and sold planes and parts without having to pay tariffs under a 45-year-old trade agreement, which would be derailed by Trump’s new tariffs. The president this week introduced levies of 10% on countries around the world, with higher duties on certain countries and regions, some of which like Europe, are key to the aerospace industry.

Imported steel and aluminum, other key materials in airplanes, are subject to separate sector-level duties that Trump announced earlier this year.

“President Trump has been clear: if you make your product in America, you won’t have to worry about tariffs,” White House spokesman Kush Desai said in an email.

Tariffs are paid by the importer, and the increased prices due to the levies would either have to be absorbed by the airplane or engine maker, by the still-fragile supply chain or by the end consumer, said Hardwick.

Jefferies analyst Sheila Kahyaoglu said in a note Thursday that a price jump on “any product within 12 months is eaten by the [original equipment manufacturer], assuming new inventory buy. Outside that time period, ultimately the buyer and hence consumer.”

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Boeing and the S&P 500

Prices for planes are negotiated in advance, and airlines have to often wait years for aircraft, so material costs can shift dramatically over that period.

“This is not where you put money down for an automobile and it ends up in your driveway” in three months, Hardwick said.

Shares of Boeing, engine maker GE and airlines tumbled again Friday, adding to the market rout after Trump announced the tariffs Wednesday.

“This is the one manufacturing sector where America has, has enjoyed a tremendous trade surplus,” said Richard Aboulafia, managing director at AeroDynamic Advisory. “So the idea of fighting a trade war for this industry, it’s living in a crystal palace hurling giant boulders.”

Global supply chain

The tariffs are also a new strain on the aerospace industry, which still has a fragile supply chain in the wake of Covid, with some parts in short supply. Major supplies have tried to quickly hire workers and ramp up production during a post-pandemic travel boom.

But airplane makers still haven’t kept up with demand.

An Airbus SE A321 plane fuselage is lifted with a crane at the company’s final assembly line facility in Mobile, Alabama

Luke Sharrett | Bloomberg | Getty Images

Even a “Made in the USA” label for an airplane is a misnomer.

For example, the supply chain for a Boeing 787 Dreamliner, which is assembled in South Carolina, spans from Japan to Italy.

Its European rival, Airbus, has a Mobile, Alabama, factory but is still on the hook for tariffs for imported parts, from wings to fuselages.

“It doesn’t matter who owns the company. If an item crosses the border, it will have to be paid by importer of record,” Hardwick said.

Airbus has expanded the factory since the first Alabama-assembled Airbus A321, an aircraft for JetBlue Airways named “BluesMobile,” rolled out nine years ago. Its bet on increasing U.S. output of its jets, which are still largely made in Europe, also includes assembly of smaller A220s in Alabama, for customers that include JetBlue and Delta Air Lines.

American Airlines workers perform maintenance on CFM-56 engine in Tulsa, Oklahoma

Erin Black | CNBC

Meanwhile, continuing along the supply chain, General Electric and France’s Safran have a joint venture in which they make top-selling CFM engines, which power both Boeing and Airbus narrow-body jets. Each company manufactures certain portions of engines, which are sent to factories in Ohio, Indiana and North Carolina for GE and outside of Paris for Safran.

Thousands of imported replacement parts for engines and other aircraft parts, many of which come from abroad, could also become more expensive.

“There’s no such thing as a national jet,” Aboulafia said.

Don’t miss these insights from CNBC PRO

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Boeing CEO Outlines Plan to Address Safety Concerns

Boeing CEO Kelly Ortberg testified before the Senate Commerce, Science, and Transportation Committee on Wednesday, outlining the company’s progress on improving its manufacturing and safety standards. The hearing comes after a January 2024 mid-air emergency involving a new 737 MAX, which left Boeing’s factory without key bolts installed.

Ortberg faced questions from lawmakers about how the company will ensure that it doesn’t repeat past accidents or manufacturing defects. Senator Ted Cruz, the committee’s chairman, invited Boeing managers and factory workers to report to him their opinions on the company’s turnaround plan.

Boeing’s Commitment to Safety

Ortberg acknowledged that Boeing still has more to do, but emphasized the company’s commitment to safety. "Boeing has made serious missteps in recent years — and it is unacceptable. In response, we have made sweeping changes to the people, processes, and overall structure of our company," he said. "While there is still work ahead of us, these profound changes are underpinned by the deep commitment from all of us to the safety of our products and services."

Improvements Across Manufacturing Lines

Ortberg and other Boeing executives have outlined improvements across the manufacturer’s production lines in recent months, including a contract worth more than $20 billion to build the United States’ next generation fighter jet. However, lawmakers and regulators have maintained heightened scrutiny on the company, a top U.S. exporter.

Federal Aviation Administration Oversight

The Federal Aviation Administration (FAA) capped Boeing’s production of its 737 Max planes at 38 a month following the January 2024 door plug blowout. The agency plans to keep that limit in place, though Boeing is producing below that level. Acting FAA Administrator Chris Rocheleau said at a Senate hearing last week that the agency’s oversight of the company "extends to ongoing monitoring of Boeing’s manufacturing practices, maintenance procedures, and software updates."

Conclusion

Boeing’s commitment to addressing safety concerns is a critical step in rebuilding trust with lawmakers, regulators, and the public. While the company still faces challenges, its progress on improving manufacturing and safety standards is an important step forward.

Frequently Asked Questions

Q: What is Boeing’s plan to address safety concerns?
A: Boeing CEO Kelly Ortberg outlined the company’s plan to improve manufacturing and safety standards, including sweeping changes to the company’s people, processes, and overall structure.

Q: What is the Federal Aviation Administration’s role in overseeing Boeing?
A: The FAA is responsible for monitoring Boeing’s manufacturing practices, maintenance procedures, and software updates, and has capped the company’s production of its 737 Max planes at 38 a month.

Q: What is Boeing’s production rate of 737 Max planes expected to be in 2025?
A: Boeing CEO Kelly Ortberg said the company could produce up to 38 737 Max planes a month this year, but would not push the production line if it’s not stable.