DOD targets $1B in high-level staff cuts

The Defense Department’s top offices will reduce their ranks by 20 percent by fiscal 2019 through a series of organizational realignments and restructuring, Defense Secretary Chuck Hagel said in a Pentagon press conference Dec. 4.

The Office of the Secretary of Defense and the Joint Staff are at the front end of budget-cutting efforts informed by the sweeping Strategic Management and Budget Review that Hagel directed earlier this year.

“With the Pentagon confronting historically steep and abrupt spending reductions after a decade of significant budget growth, there is a clear need, and an opportunity, to pare back overhead and streamline headquarters across the department,” Hagel said. “These reductions are only a first step in DOD’s efforts to realign defense spending to meet new fiscal realities and strategic priorities.”

The secretary said some of the workforce cuts would be through attrition. Some will come from the civilian force and many will come from contractors as officials seek to streamline OSD.

The restructuring would add new functions to the Office of the Deputy Chief Management Officer, which traditionally has been charged with business transformation and financial reform efforts. The Office of the Director of Administration and Management (DA&M) and its subordinate elements will be realigned under the DCMO, as will the newly combined Office of the Assistant to the Secretary of Defense for Intelligence Oversight and Defense Privacy and Civil Liberties Office.

The Office of the DOD CIO also is strengthened under the new plans, “to address the growing IT and cyber challenges, improve oversight of IT resources and further enable successful implementation of the Joint Information Environment,” according to a DOD memo. To achieve that goal, Hagel said DCMO’s oversight of business systems will be transferred to the CIO office.

The Office of the Under Secretary for Defense Policy will be restructured to focus on the Asia-Pacific and absorb the Office of Net Assessment, among other objectives.

Five deputy undersecretaries of Defense will be eliminated, with their functions either merged into existing assistant defense secretary roles or re-designated as non-secretary positions.

Additionally, internal resources within the Office of the Under Secretary of Defense for Personnel and Readiness face rebalancing “to better position the office to address major concerns related to DOD downsizing,” according to Pentagon documents outlining the changes.

“The OSD reductions are comprehensive, touching many aspects of our organization, personnel and resources,” Hagel said. “We recognize that the dollar savings generated by the OSD reductions – at least $1 billion over five years – is a small percent of the sequester-level cuts, underscoring the challenges that face this department in absorbing these very large sequester-level reductions. Still, every dollar that we save by reducing the size of our headquarters and back-office operations is a dollar that can be invested in warfighting capabilities and readiness.”