Okay, back to the OP--what Webeevdrivers said makes the most sense to me. If the Department of SC Expansion (made that up) were bloated and moving too fast to be helpful, then it makes sense that they would be significantly downsized. Again, we don't know if the 500 represents ALL of that group. And Elon's tweet about expanding more slowly indicates it's not the whole department, or that he will re-hire whoever is really needed.
I saw Elon in person at a university he visited a few years ago. The university president had a fireside chat with him on stage with most of the student body in attendance. Elon said something that struck me at the time, along the lines of (not verbatim): "When you're trying to solve a hard problem, check your assumptions--start eliminating things you assume are needed, and then you will find out what really was (and was not) needed." That sentiment aligns with what we're seeing here.