Reuters World News - Shutdown starts, 'fat generals', Silicon Valley at the Pentagon and Pfizer

Episode Date: October 1, 2025

The U.S. government has shut down most of its operations setting off what could be a long standoff. Defense Secretary Pete Hegseth slams "fat generals" as President Donald Trump touts cities as troop "training grounds." From tech bro to battle bro – how a Silicon Valley "warlord" got the Pentagon's attention. Trump cuts a deal with Pfizer to sell cheap drugs direct to consumers. And Labubu-maker Pop Mart takes a leaf from the Disney playbook.  Sign up for the Reuters Econ World newsletter here. Listen to the Reuters Econ World podcast here. Find the Recommended Read here. Visit the Thomson Reuters Privacy Statement for information on our privacy and data protection practices. You may also visit megaphone.fm/adchoices to opt out of targeted advertising. Learn more about your ad choices. Visit megaphone.fm/adchoices

Today, the US government goes into shutdown. Defence Secretary Hexeth takes aim at generals he calls fat as he warns change is coming to the military. Silicon Valley tech entrepreneurs take their skills to the battlefield, and Trump cuts a deal with Pfizer to sell cheap drugs direct to consumers. It's Wednesday, October 1st. This is Reuters World News, bringing you everything you need to know from the front lines in 10 minutes, seven days a week.

I'm Kim Vinal in Wanganui, New Zealand. The US government has shut down. At just after midnight, federal funding lapsed after the Senate failed to pass a funding bill, meaning all non-essential services are halted and tens of thousands of workers will be sent home without pay. President Trump is threatening to use the opportunity to continue a permanent purge of federal workers,

We can do things during the shutdown that are irreversible, that are bad for them and irreversible by them, like cutting vast numbers of people out, cutting things that they like, cutting programs. That would be a further brain drain for the government, with more than 150,000 workers leaving the payroll this week after taking an earlier buyout. So what stays open and what will close? Social Security will keep issuing retirement and disability benefits, but 12,000. 12% of the entire department will be furloughed. The IRS will be staffed for five days, although it's not clear what happens after that.

Two million military personnel will be kept at their posts without pay, as will some 13,000 air traffic controllers, although airlines have warned to expect delays. The courts have warned they could run out of money to keep fully running by Friday. Immigration courts, though, will keep running, because President Trump declared illegal immigration a national emergency. A second detainee has died a week after the Dallas ice shooting.

31-year-old Mikuel Angel Garcia from Mexico was wounded by a sniper at the Dallas Field Office and has died as a result of those injuries. A third victim remains in hospital. A rare deal between Washington and Tehran marking an unusual moment of collaboration. The U.S. has begun deporting around 400 Iranians. The group includes both convicted criminals and people who had entered the U.S. illegally.

It's according to officials who spoke on condition of anonymity. Good morning and welcome to the War Department, because the era of the Department of Defense is over. Defense Secretary Pete Hegseth, speaking to Annen. an unprecedented gathering of top military commanders at Quantico. He says it's time to get rid of diversity initiatives, emphasizing, among other things, fitness and body size. It's completely unacceptable to see fat generals and emeralds in the halls of the Pentagon.

Fitness tests will now use the male standard for both men and women, meaning everyone in combat roles must meet the same physical requirements regardless of gender. President Trump also spoke at the meeting, suggesting American cities could be used to prepare for foreign conflicts. We should use some of these dangerous cities as training grounds for our military, national guard, but military. Pentagon reporter Idris Ali is in Washington. For him to now say, use this as an opportunity to train for, you know,

foreign conflicts, for other situations, I think it's going to raise a lot of eyebrows because since the beginning of the United States, there was sort of this understanding that the military would not be involved in the United States. And for the president to be saying it so bluntly in front of generals and admirals who sort of command these forces, I think is really fascinating and for many people scary.

Another part of the Pentagon's push to reshape the armed forces involves tapping Silicon Valley entrepreneurs who are turning their talents to military tech. That is the Bullfrog, an AI-powered machine gun that tracks and shoots down drones. It's built by Allen Control Systems, founded by Steve Simony, a former Silicon Valley star, who sold his startup to DoorDash for $125 million. Defense and space reporter David Jeans has more now on the entrepreneurs creating the future of warfare.

I think what they bring with them is they have... higher tolerance for risk, a high tolerance for failure, and a higher tolerance for raising hype around their companies, they also bring with them a new energy to this space, which has disrupted the traditional prime contractors like Boeing, Northrop Grumman and Lockheed Martin. David says that what's been most striking is the speed at which Silicon Valley has shifted. It was only in recent years that people were protesting military companies and military work, And now Silicon Valley and its investors are all in on a more patriotic and more military-focused approach. I think that that has come with the understanding that the world is starting to feel like a less safe place.

And there's also an understanding that the U.S. military is largely unprepared for the future of warfare. And that Silicon Valley believes that it has the answer to help it modernize. President Donald Trump says he's made a deal with drug company Pfizer to sell cheap medications directly to consumers on a website called Trump RX. Pfizer has agreed to provide some of their most popular current medications to all consumers at heavily discounted prices of anywhere between 50 and even 100%. It's for Americans on Medicaid and will launch next year. As part of the deal, Pfizer will invest $70 billion to reshore domestic manufacturing. in the U.S. In exchange, Pfizer gets relief from 100% tariffs on imported pharmaceuticals, which Trump announced

last week. Trump says other drug makers will follow Pfizer's lead. Medicare, which covers people 65 or older, or those who have disabilities, is not included in the deal. In the Philippines, dozens are dead after a 6.9 magnitude earthquake hit the center of the country. agencies are searching for survivors and trying to restore power and water supplies. A hospital near the epicentre is overwhelmed, according to officials.

And now, Labuboos, and how the makers of the ugly cute dolls are borrowing from Disney's playbook to turn their monsters into global franchises. Owners Pop Mart are planning to create content, merchandising, and to expand on their existing small theme park in Beijing. Here's Reuters China Consumer correspondent, Casey Hall. They definitely seem keen to do more in the theme park space without giving a concrete timeline for when that would actually be complete. The CEO of Potmart Wang Ning has also told Chinese state media

that they've spoken to studios about the possibility of content, something like TV or film products, again, without giving a timeline. People are starting to ask questions about the longevity of Lubu's popularity. So it really is vital for them that they can create a situation where they can utilize the popularity of Lubu in a way for a bit longer. And for today's recommended read, how Tony Blair's return to Middle East diplomacy re-opens old wounds and new doubts. Trump named Blair to serve on a Gaza peaceboard, but not everyone is happy with the decision. You can read more by following the link in the podcast. description. For more on any of the stories from today, check out Reuters.com or the Reuters app.

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