Booz Allen plans layoffs as government cuts spending

Booz Allen Hamilton, a consulting firm, said Friday it is planning to cut 2,500 jobs as the Trump administration seeks to reduce government spending levels by discontinuing federal contracts. 

The federal shift is projected to decrease Booz Allen’s fiscal 2026 revenue by 3 percent, as most of the company’s earnings are rooted in government contracts. 

Horacio D. Rozanski, president and chief executive officer, said the company will treat the change as a “short term disruption” while preparing for future opportunities. 

“Booz Allen is not standing still to see what happens next, we are moving aggressively to lead the way in a changing market,” Rozanski said during Friday’s earnings call. 

Booz Allen’s civil business is slated to see workforce reductions as federal agencies, including the Department of Defense have discontinued or are reviewing business agreements with contractors. 

Rozanski, on the Friday call, said their objective was geared toward enabling a more “nimble” and “efficient” federal government.

“We are seeing agency reorganizations, reductions in government personnel and spending levels, as well as contract reviews,” Rozanski said on the call. “These are especially acute in civilian agencies.”

His words come just over a month after Defense Secretary Pete Hegseth said a Defense Health Agency would no longer use consulting services from Accenture, Deloitte, Booz Allen and other firms in a multi-billion dollar cost saving effort. 

President Trump has sought out to reduce the size and scope of the federal government since returning to the White House earlier this year. Elon Musk’s Department of Government Efficiency has played an important role in efforts to cut government spending, which has prompted backlash from Democrats over concerns of overreach.