Deloitte Plans Layoffs Amid Federal Consulting Contract Cuts

Deloitte is planning layoffs in its government and public services division following significant cuts to its federal contracts, Business Insider reports.

The company has faced scrutiny from the Department of Government Efficiency (DOGE), which has been leading a push to reduce consulting costs within the federal government.

According to internal communications shared with Business Insider, Deloitte’s CEO for Consulting, Jason Salzetti, informed employees during a call on Thursday that the company would be separating a “small percentage” of its workforce in its government and public services practice by the end of April. While the exact number of affected employees remains unclear, the company has confirmed that these layoffs are part of a broader strategy to adapt to moderating growth, evolving government client needs, and low levels of voluntary attrition.

Deloitte’s government and public services practice, which employs more than 15,000 people in the US and is valued at $5.5 billion, has been hit hard by changes in federal contracting. Since January, 127 of Deloitte’s federal contracts have been either cut or modified, a direct result of DOGE’s push to reduce costs across government consulting firms. These cuts have amounted to around $371.8 million, representing over 11% of the $3.3 billion in contracts Deloitte secures annually with US federal agencies.

The General Services Administration (GSA), which has been spearheading the initiative to reduce consulting costs, requested detailed proposals from 10 consulting firms, including Deloitte, regarding their pricing and cost-cutting suggestions earlier this week. While the results of these submissions have yet to be disclosed, it is clear that the GSA is seeking further reductions from the consulting industry.

In a statement, Jonathan Gandal, a managing director in Deloitte’s reputation division, acknowledged the layoffs, explaining that the company was making “modest personnel actions” in response to the evolving needs of its government clients. Despite the challenges, Deloitte executives have projected that the company’s fiscal year, which ends on May 31, will conclude with revenue above expectations. Additionally, they confirmed that performance bonuses for the current fiscal year, which are typically paid in June, would be issued as usual.

While Deloitte has not disclosed the full impact of the DOGE-driven contract cuts, employees in the public sector divisions have expressed concern about the shifting dynamics within the company. Some employees have pointed to growing alarm over the broader economic environment, particularly in response to policies such as tariffs and other regulatory changes introduced under the Trump administration.