Deloitte U.S lost 129 federal contracts worth $372 Million

• 2025 is off to a rough start for US Consulting firms, it seems.
• The Trump administration is aggressively cutting federal spending on consultants to save almost $2 trillion from the annual federal budget by 2026.
• And the Big 4 firm Deloitte is taking the biggest hit.

What’s happening?

We all know that U.S. government (under Trump and Elon Musk’s Department of Government Efficiency or DOGE) is cutting down on spending.

Their ultimate goal is to save between $1 trillion and $2 trillion from the annual federal budget by 2026.

How do they plan to achieve it? By eliminating inefficiencies and reducing government expenditure.

And in pursuit of that ambitious goal, Musk and his team reviewed and eliminated all the “non-essential” consulting contracts.

Here is how it went.

Which consulting firm is hit the hardest?

Deloitte is facing the biggest impact from the Trump administration’s federal consulting budget cuts.

According to a Financial Times analysis of data from DOGE, Deloitte has had at least 129 contracts terminated or downsized. That’s more than twice as many as any other consulting firm!

These cancellations have cost Deloitte $372 million in revenue.

However, DOGE likes to call it “$372 million in taxpayer savings.”

Other consulting firms facing significant setbacks:

• Booz Allen Hamilton: 60 contracts terminated
• Guidehouse (spun off from PwC in 2018): 54 contracts terminated
• Accenture: 30 contracts terminated
• General Dynamics: 16 contracts terminated
• IBM: 10 contracts terminated
• Leidos: 7 contracts terminated
• CGI Federal: 7 contracts terminated
• SAIC: 5 contracts terminated

Biggest contracts terminated

These terminations affect contracts across multiple federal agencies, including,

• HHS (Health & Human Services): The U.S. federal agency responsible for protecting public health and delivering essential services.
• CDC (Centers for Disease Control and Prevention): Federal agency under HHS tasked with public health protection.
• NIH (National Institutes of Health): The nation’s medical research agency, also under HHS.
• Education
• Agriculture
• Environmental Protection Agency
• US Treasury

But heaviest cuts are concentrated around public health and technology agencies!

The following agencies account for over $300 million in terminated digital transformation initiatives:

• $158 million – NIH Digital Services contract with Deloitte
• $137 million – HHS Software contract with Accenture
• $126 million – Office of Refugee Resettlement (ORR) Mission Support contract with General Dynamics
• $68 million – NIH Systems Engineering contract with Deloitte

Also read: EY, BCG, Accenture, Booz Allen are making serious $$$ from U.S. government!

The bigger picture: Federal contract cancellations surge

Beyond consulting, federal contract terminations surged in March, particularly at:

• US Agency for International Development
• Department of Veterans Affairs

What’s being cut?

Projects that are deemed “non-essential” or lacking clear outcomes are getting hit the hardest.

Deloitte has lost contracts with several key government departments, including:

• Diversity, Equity & Inclusion (DEI) Initiatives: Entirely terminated.
• “Organizational Transformation” Projects: Eliminated or drastically reduced.
• Strategic Planning & Enterprise Risk Management: Axed due to lack of measurable outcomes.
• Programs with Soft Deliverables or Vague Metrics: First to be eliminated.

What’s surviving the cuts?

• Technical Services (Cloud, Operations & Maintenance): These contracts are protected due to their critical role in maintaining government systems.
• Modernization Projects: Larger digital transformation efforts are being modified rather than scrapped.
• “Advisory” Services: Experiencing the deepest cuts, with contracts terminated first.

What’s next?

March 31st was the deadline for 10 major consulting firms to submit their cost-cutting plans.

The General Services Administration (GSA) introduced new rules to enforce these cuts.

The government asked the firms to:

• Justify their work in simple terms (“a 15-year-old should be able to understand”).
• Outline how much work is billed hourly vs. fixed price.
• Shift to performance-based contracts instead of hourly billing models.
• Identify 25-30% in additional savings (offer price cuts and other concessions)

Also read: Saudi Arabia’s PIF, $925Bn sovereign wealth fund bans PwC

Challenges in measuring cost savings

While Doge says it has identified $130 billion in potential savings, experts argue that its methodology is flawed.

Roughly 50% of the 7,100 contract cancellations lack sufficient data for external audits.

Additionally, many contracts span multiple years with spending limits that may not be fully utilized.

That’s why some consulting executives believe that there is a lack of clarity in defining consulting work.

Hidden impact: Job losses

While the financial impact is clear, there is a hidden cost; Job losses.

Job cut projections:

• Deloitte: Up to 8,000+ jobs are at risk at Deloitte, if the current trend continues.
• Accenture, Booz Allen, and Others: A combined 4,000-5,000 jobs could be impacted in the next 6-12 months.
• Consulting and Tech Sectors: Firms providing advisory, technology, and modernization services are expected to face sustained revenue losses.

A rough year for the Big 4

Deloitte is not alone who is bearing the brunt of a sluggish consulting market.

PwC: Just last month Saudi Arabia’s Public Investment Fund (PIF) and its 100 subsidiaries banned PwC from advisory projects. (Guess what…PIF, one of the region’s largest buyers of these services!)

Those contracts included strategic consulting, mergers & acquisitions, tax advisory, and finance transformation.

KPMG: KPMG then came out with the news that it is merging its smaller member firms—especially those bringing in under $300 million in revenue—into larger clusters. The firm is taking this step to deal with stricter regulatory scrutiny and a downturn in the market.

EY: EY Australia has also been facing a challenging business climate for accounting firms. With slowing growth, the firm is planning to cut approximately 1% of its workforce.

PwC: In 2024 alone, PwC parted ways with 124 partners. In 2025, PwC UK is planning to trim its partner ranks even further.

Why? To safeguard profits as consulting demand declines and costs increase!

What awaits the consulting industry?

The consulting landscape is poised for a lasting change.

There will be a fundamental shift in,

• How the U.S. government engages with external consulting firms
• And what qualifies as “consulting.”

Needless to say, as contracts transition toward performance-based models, firms will need to adapt to a new era of measurable outcomes and accountability.

Will this impact India? Considering most of these firms’ US offices employ thousands of professionals in India!