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
DOD cuts $580M in programs, contracts, and grants
The largest cut goes to an HR software program that's consumed more than seven times its budget.
The Pentagon is eliminating over $580 million in programs, grants, and contracts 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 cuts in a memo released on Thursday, saying they affected efforts “inconsistent with the priorities of the DOD” and that they would free up about $170 million for better priorities.
The most noteworthy termination was a human-resources software-development program and its associated contracts. Launched in 2018 as a one-year, $36-million effort to streamline HR operations, the program has consumed more than $300 million and has yet to become operational.
"So, that's 780% over budget; we're not doing that anymore," Hegseth said in a video posted to his X account.
He said the program was aimed at “an important mission we still need to achieve,” and that he has directed DOD personnel to develop a new plan within 60 days to fulfill it.
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 IT-service contracts with the firms McKinsey & Company and Gartner. 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 said were made with DOGE’s help — brings the department’s running total of cuts to $800 million since the beginning of the Trump administration.