A new chairman of May's Conservative party was announced on Twitter, only for the tweet to be deleted and another man named for the post.
Immigration minister Brandon Lewis later arrived at Downing Street to be told he was to be made chairman instead.
The big victor of the shake-up was former Justice Secretary David Lidington, who replaced Damian Green as Minister for the Cabinet Office, but was not awarded the title of First Secretary of State enjoyed by his predecessor.
The appointment of Lewis as McLoughlin's replacement and minister without portfolio was initially overshadowed by the mistaken announcement that Grayling was being moved from Transport secretary to Conservative chairman.
While viewed as a chance at a fresh start, the reshuffle brings risks of upsetting the delicate balance of eurosceptic and pro-European ministers.
The reshuffle was sparked in part by the resignation of May's ally, Damian Green as the de-facto deputy prime minister, after police who were investigating a separate matter revealed they had found thousands of pornographic images on his computer.
He also drew fire after a protester interrupted May's speech to the party conference in October - an address that was also marred by a coughing fit and a collapsing set. Rising star James Cleverly, who is open about his prime ministerial ambitions, is a step closer to realising those with his first promotion - he joins Cabinet as Lewis' deputy.
"(Lewis is) the type who might have the guts and inclination to take on the party internally and to be a loud media voice to take away the heat from Theresa May", a Conservative member said.
Brexit minister David Davis, foreign minister Boris Johnson, finance minister Philip Hammond and interior minister Amber Rudd all kept their positions, along with Greg Clark who leads the business ministry.
But in a blow to her, the minister for Northern Ireland, James Brokenshire, stepped down because of ill-health.
Junior trade minister Mark Garnier was the first to go, tweeting that he was "very sad to have lost my job" but would support the government from the backbenches of the House of Commons.
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