U.S. Defense Secretary Pete Hegseth has announced the cancellation of IT service contracts totalling $5.1 billion. This decision impacts major companies like Accenture and Deloitte. According to the U.S. Department of Defense, the move is part of a larger effort to cut down on what the Pentagon considers ‘wasteful spending’.

Citing a few examples, Hegseth said, “... for consulting services from Accenture, Deloitte, Booz Allen, and other firms. They're going to save the department $1.8 billion.” In a memo signed on April 10, Hegseth referred to the cancelled contracts as "non-essential spending on third-party consultants" for work that Pentagon staff could handle themselves. He highlighted that ending these contracts would save an estimated $4 billion. 

The Pentagon is cancelling several major contracts, including a $1.8 billion consulting deal managed by the Defense Health Agency, a $1.4 billion enterprise cloud IT services contract awarded to a software reseller, and a $500 million Navy contract for business process consulting. It’s also ending a $500 million IT help desk services contract under the Defense Advanced Research Projects Agency (DARPA), as these services are already being provided by the Defense Information Systems Agency (DISA). The Pentagon will stop more than $500 million in funding to two universities that have been accused of allowing antisemitism and backing diversity, equity, and inclusion (DEI) programs. This comes on top of the $70 million already taken back from three other universities in recent weeks.

Hegseth explained that the budget cuts are meant to shift money towards better healthcare services for military members and their families, instead of spending “$500 an hour” on business consultants. He also repeated the Trump administration’s promise to cut unnecessary spending, especially on contracts related to DEI programs, climate change efforts and pandemic response work. This announcement comes after Hegseth’s statement on March 20, where he shared plans to cut $580 million from various programs, contracts, and grants. Altogether, the total cuts now add up to nearly $6 billion. These changes are part of the Department of Government Efficiency (DOGE) initiative, which is focused on reducing Pentagon expenses and putting more resources into strengthening military capabilities. “We’re excited to make these cuts on behalf of you, the taxpayer, and the warfighters here at the department,” Hegseth said.

Since President Donald Trump took office, the US government has started making big budget cuts in all areas. These cuts are mainly being carried out by the Department of Government Efficiency (DOGE), which is led by Elon Musk. His goal is to reduce government spending by $2 trillion. As a result, around 60,000 federal workers have either lost their jobs or been put on leave. Some federal agencies, like the United States Agency for International Development (USAID) and the Consumer Financial Protection Bureau, have been shut down. In addition, funding has been reduced for many areas, including USAID and education.

The government says these steps will help save a lot of money and make things work more efficiently. But critics believe that the cuts mainly hurt important services and the people who need help the most. This has caused large protests across the US, and some people have even taken legal action to stop certain parts of the policy.