Defense Secretary Slashes $580 Million In Wasteful Spending—Targets Overdue, Overpriced Projects

On Thursday, Defense Secretary Pete Hegseth signed a memo aimed at trimming wasteful spending within the Department of Defense (DOD).

This latest effort eliminates over $580 million in various contracts, programs, and grants, continuing a broader initiative to better allocate taxpayer dollars.

The directive is in line to ensure that funds are used effectively to support the DOD’s mission and the country’s military readiness.

“In other words, [the expenditures] are not a good use of taxpayer dollars; [and], ultimately, that’s who funds us,” Hegseth said. 

“We owe [taxpayers] transparency and making sure we’re using [the money] well,” he added. 

The contracts being called off for the spending cuts were identified by the Department of Government Efficiency (DOGE), overseen by Tesla CEO Elon Musk.

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The cuts target several key areas, including a software development initiative for the Defense Civilian Human Resources Management System.

Initially started in 2018 with a projected cost of $36 million and a one-year completion timeline, the program has experienced major delays and exceeded its budget.

Hegseth highlighted that the project is now almost eight years overdue, with costs soaring to $280 million over the original estimate. So the project has been scrapped.

Along with the software project, Hegseth highlighted reductions in external consulting contracts, including one worth $30 million. This contract was associated with the purchase of unused software licenses.

Additionally, the DOD is cutting $360 million in grants, which support various initiatives, such as a $6 million project aimed at reducing emissions from Navy ships and a $9 million grant for creating “equitable AI and machine learning models.”

“I need lethal machine learning models, not equitable machine learning models,” said Hegseth.

Shares of companies in the defense sector are on watch as details of the companies whose contract have been shelved are not immediately clear. 

DOGE has been instrumental in driving significant cost-cutting measures and restructuring initiatives, resulting in the closure of multiple government agencies and large-scale layoffs of federal workers.

Recent reports indicate that the U.S. DOGE Service achieved $65 billion in savings.

With this announcement, the Department of Defense has now saved $800 million since February 2025 through targeted cuts.

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