DOD cuts $580M in programs, contracts and grants
U.S. Secretary of Defense Peter Hegseth listens as U.S. President Donald Trump delivers remarks in the Oval Office of the White House on March 21, 2025 in Washington, DC. Hegseth issued a memo Thursday announcing significant cuts to his agency's contract, grant and program spend. Anna Moneymaker/Getty Images
The latest round of Pentagon spending cuts — which include a delayed HR software program — brings the department’s running total of eliminated programs to $800 million since the start of the Trump administration.
The Pentagon is eliminating over $580 million in programs, grants and contracts across the department that it called “wasteful spending,” with a long-stalled software modernization program accounting for almost half of the cuts.
Defense Secretary Pete Hegseth announced the spending drawback in a memo released on Thursday, writing that the terminated expenditures were “inconsistent with the priorities of the DOD.” In addition to the topline figure, Hegseth also wrote that the move would result in approximately $170 million in estimated savings which could be reallocated across the department.
The most noteworthy termination was a human resources software development program and its associated active contracts. DOD said the initiative was intended to help streamline a significant portion of the department’s legacy HR program but has become bogged down by hefty cost overruns and delays.
The program started in 2018 and was expected to be completed in one year at a cost of approximately $36 million. It is now six years behind schedule and the total cost has soared to more than $280 million over its initial estimate.
"So, that's 780% over budget; we're not doing that anymore," Hegseth said in a video that was shared on his X account.
He noted in the memo, however, that the initiative is “an important mission we still need to achieve,” and that he has directed key DOD personnel to develop a new plan within 60 days to achieve the program’s initial objective.
Hegseth also announced that DOD is cutting $360 million in grants tied to diversity, equity and inclusion initiatives — a key target of the Trump administration and Elon Musk’s cost-cutting Department of Government Efficiency — including a $9 million university grant for developing equitable AI and machine learning models.
"I need lethal machine learning models, not equitable machine learning models," he said.
DOD also announced the termination of $30 million in contracts with external consultants, including with the firms McKinsey & Company and Gartner for IT services. Those cuts come after the Trump administration asked agencies to review their consulting contracts with large firms in an effort to cut “non-essential consulting contracts.”
Hegseth said the recent round of contract terminations — which he attributed to DOGE’s help — brings the department’s running total of cuts to $800 million since the beginning of the Trump administration.