The Department of Government Efficiency (DOGE) has eliminated more than 120 contracts with consulting firm Deloitte, worth over $1.16 billion, according to an analysis by Fortune. This is part of a broader trend of private sector contract terminations aimed at reducing government spending and balancing the federal budget.
DOGE’s mass elimination of government contracts has hit several major consultancies, including Booz Allen Hamilton, Accenture, and IBM. Deloitte has reportedly lost over twice as many contracts as any other consultancy, with more than 10% of its revenue coming from government contracts.
Economists warn that this trend threatens the future revenues of tech and consulting juggernauts, as companies rely heavily on government contracts for funding. Abigail Blanco, an associate professor of economics at the University of Tampa, said: “It’s a massive source of revenue for many different types of firms… So there are lots of entities, private entities, who rely on—various government contracts or government funding to fulfill their primary objectives.”
Analysts fear that continued substantial contract cuts could lead to significant losses for companies in the defense industry. Booz Allen Hamilton gets about 98% of its revenue from government contracts, and Wells Fargo equity analyst Matthew Akers warned that “government services contracts periodically come up for recompete, and any contract loss could materially affect results.”
The mass contract cuts are part of President Trump’s efforts to overhaul government systems through mass funding cuts. Economists argue that this approach can create a sense of uncertainty, causing companies to adopt a “wait-and-see” approach to focus on finding alternative sources of funding, rather than innovating and expanding their businesses.
DOGE claims to have saved taxpayers about $371.8 million from the terminated contracts, but Bank of America warns that these claims may be overstated. The advisory group’s actual savings are difficult to track due to new contracts and inflated costs for products that underdeliver.
Source: https://fortune.com/2025/04/03/doge-private-contract-crackdown-deloitte-consultancies