Secretary of Defense Pete Hegseth welcomes Elon Musk as a visitor to the Pentagon, Washington, D.C., March 21, 2025. The appearance of U.S. Department of Defense (DoD) visual information does not imply or constitute DoD endorsement. Image: DoD photo by U.S. Air Force Senior Airman Spencer Perkins
By: FEDweek StaffDefense Secretary Pete Hegseth has announced $5.1 billion in DoD spending cuts, targeting “wasteful” contracts and “ancillary” services. Highlights include cuts of $1.8 billion in consulting contracts (Hegseth cited “Accenture, Deloitte, Booz Allen and other firms”) from the Defense Health Agency, $1.4 billion for enterprise cloud IT services, and $500 million for Navy business process consulting.
Hegseth emphasized reallocating funds towards better health care for warfighters and their families. Additional reductions include a $500 million contract for duplicative IT help desk services and 11 contracts related to diversity, equity, inclusion (DEI), climate change, and COVID-19 responses.
Funding to certain universities it says support DEI programs or that it claims tolerate antisemitism has also been paused. The cuts contribute to nearly $6 billion in savings under the Department of Government Efficiency (DOGE) initiative. Hegseth reaffirmed his commitment to ongoing reviews and thanked DOGE for identifying inefficiencies.
DoD recently issued guidance for implementing a late-March directive requiring components to conduct a “comprehensive review” of their organizational structures and workforces, with findings due to Secretary Pete Hegseth by May 24.
The directive emphasizes that every position must justify its necessity, particularly under wartime conditions, and that roles not directly contributing to “lethality” should be restructured, outsourced, or removed.
Key principles include consolidating overlapping functions, reducing excess layers of supervision, and empowering decision-makers. The guidance also calls for eliminating outdated workflows and leveraging automation and AI for increased efficiency.
Offices duplicating functions or focused on coordination rather than deployment should be consolidated, and non-essential roles, such as those unrelated to inherently governmental functions, should prioritize privatization. The memo cites examples like downgrading supervisory roles with minimal oversight responsibilities and shutting down offices that have not delivered significant capabilities in five years.
The guidance includes examples to “convey the mindset and level of detail we will apply during the upcoming review process”of positions, including:
• If a GS-12 or GS-13 position is supervisory but oversees only one person, it should be considered for consolidation with another position or returned to a non-supervisory grade.
• If a GS-14 or GS-15 claims management status but supervises fewer than three people, the position should be considered for consolidation, downgrading, or recategorization as non-managerial and rejustified.
• If a position exists to manage or track documents between systems, the process – not the person – is broken and should be rectified.
• If two offices produce separate strategies or policies on the same topic, one should be considered for absorption or elimination.
• If an office exists primarily to coordinate between other offices, it should be considered for absorption into one of them. Coordination should not be a standalone mission.
• If a service function exists at multiple levels with no unique contribution ( e.g., multiple communication offices, help desks), it should be consolidated at a single level. If it does have a unique contribution, it should be minimized to just those functions.
• If a non-research program office has not deployed a new and meaningful capability in the last fi ve years, its functions should be absorbed or shut down.
• All functions that are not inherently governmental ( e.g., retail sales and recreation) should be prioritized for privatization.
While the memo doesn’t specify job cut projections, earlier estimates suggest a potential 5-8 percent reduction of the 900,000-strong workforce, including non-appropriated fund employees.
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