Washington DC: US Defence Secretary Pete Hegseth on Friday announced the cancellation of IT service contracts worth $5.1 billion, impacting major firms such as Accenture and Deloitte, as part of a broader crackdown on what the Pentagon describes as unnecessary expenditures, media reports said.

“...for consulting services from Accenture, Deloitte, Booz Allen, and other firms. They're going to save the department $1.8 billion,” Hegseth said, citing specific examples.

In a memorandum dated April 10, Hegseth described the affected contracts as avoidable external spending on tasks that could be handled by Pentagon personnel.

These cancellations are expected to save nearly $4 billion, according to the Department of Defence.

The cuts include a $1.8 billion consulting agreement under the Defense Health Agency, a $1.4 billion cloud IT contract managed by a software reseller, and a $500 million Navy agreement for business process consulting.

Also on the chopping block is a $500 million IT help desk deal linked to the Defense Advanced Research Projects Agency (DARPA), which the Pentagon believes duplicates services already provided by the Defense Information Systems Agency (DISA).

In addition to corporate contracts, more than $500 million in federal funding will be frozen for two universities accused of tolerating antisemitism and promoting diversity, equity and inclusion (DEI) programmes — on top of $70 million already rescinded from three other academic institutions in recent weeks.

“These funds are better used to improve healthcare services for military families than to pay consultants $500 an hour,” Hegseth said, adding that the Trump administration was committed to cutting wasteful expenditure linked to DEI, climate policy, and pandemic-related efforts.

Friday’s announcement follows another round of cuts declared on March 20, where the Pentagon slashed $580 million from various contracts, grants and programmes.

Altogether, the reductions now total nearly $6 billion under the Department of Government Efficiency (DOGE), a Trump administration initiative aimed at trimming excess spending and focusing resources on combat readiness.

“We’re excited to make these cuts on behalf of you, the taxpayer, and the warfighters here at the department,” Hegseth said.

Since President Trump returned to office, the White House has undertaken aggressive cost-cutting across federal agencies, led by DOGE under Elon Musk.

Around 60,000 federal employees have reportedly been laid off or placed on leave, and several departments — including the US Agency for International Development and the Consumer Financial Protection Bureau — have been shuttered.

While the administration claims these measures will increase efficiency and result in massive savings, critics argue the cuts disproportionately impact vital services and vulnerable populations.

The moves have sparked protests and legal action across the United States.