The Hardest-Hit Industry by DOGE Budget Cuts: Government Consultants and Media Firms

Key Companies Affected by DOGE’s Cost-Cutting Measures / Andrew Harnik via Getty

The cost-cutting actions of Elon Musk's Department of Government Efficiency (DOGE) are having a significant impact, with the first publicly available data showing that several government consultants are facing substantial losses. These companies are grappling with hundreds of millions of dollars in canceled or renegotiated contracts as part of DOGE's broader efforts to reduce government spending.

Among the hardest-hit companies is Deloitte, a global consulting firm based in London, which has had contracts worth more than $219 million canceled, according to DOGE. While this is a significant sum, it represents a relatively small portion of Deloitte's total revenue, which was reported at $67.2 billion for 2024. Nevertheless, the repercussions for smaller consulting and development firms, particularly those based in the Washington, D.C. area and dependent on government contracts, could be much more severe in proportion to their size.

In response to these cuts, a group of affected companies has filed a lawsuit against the administration, claiming that the DOGE cuts have caused "enormous and concrete harm" to their businesses. One plaintiff specifically highlighted the problem of unpaid invoices for services already rendered, pointing out the unfairness of the situation given that the government had approved and commissioned the work.

One official from a company impacted by the cuts explained that 20 contracts had been terminated in recent weeks. They also raised concerns about the federal government’s failure to pay for work that had already been approved, stressing that this situation is fundamentally unjust.

In addition to consulting firms, the media industry has also been affected, though to a lesser extent. Media outlets are facing a decline in government subscriptions, resulting in an estimated loss of more than $13 million in potential revenue. While this represents only a small fraction of the total savings claimed by DOGE, it is still a noteworthy blow for some media companies.

The Top Companies Facing DOGE’s Cuts

The full impact of DOGE’s actions on the affected companies is still uncertain, as Musk’s team has made multiple revisions to the claimed savings figures. The exact terms of the affected contracts are also not fully disclosed. However, it is clear that consulting and development firms like Deloitte, DAI Global, and International Development Group (IDG) have been hit hardest.

One of the most significant cuts in terms of claimed savings is attributed to a contract with IDG Advisory Services, which DOGE claims saved taxpayers $654.99 million. However, IDG's website lists only $25 million in current projects, and it is not clear what the terms of the contract were. It appears that the contract in question was an indefinite delivery/indefinite quantity (IDIQ) contract, a type commonly used by the government to set up parameters for future work without committing to paying the full amount.

Many of the canceled contracts have involved work for the U.S. Agency for International Development (USAID), particularly in regions like the Middle East and Africa. DOGE’s focus on consulting and development firms aligns with the agency’s high volume of contracts for international development and humanitarian assistance projects.

To date, DOGE has claimed a total of nearly $7.2 billion in savings from canceled or renegotiated contracts, with USAID accounting for about $5.2 billion of this amount. The lawsuit filed by a coalition of affected companies, Global Health Council v. Donald J. Trump, claims that these cuts have had a "catastrophic effect" on humanitarian missions supported by these contractors.

Focus on Media Companies: Impact and Savings

While consulting firms have faced the brunt of the cuts, media companies have also attracted significant attention from the White House, particularly in the form of canceled government subscriptions to outlets like Politico. The cancellation of at least 90 Politico subscriptions across various government departments has saved an estimated $8.5 million.

White House Press Secretary Karoline Leavitt has made it clear that these cancellations were part of the administration’s commitment to ending what she described as the "subsidizing" of Politico’s services on the taxpayers’ dime. Despite Politico's role as a leading political news outlet, it was sold for $1 billion in 2021 and generated $200 million in annual revenue, making the government subscriptions a relatively small fraction of its business.

Similarly, Bloomberg has faced cancellations of over $2 million in subscriptions, but this represents an even smaller impact on the company’s overall revenue, which exceeded $10 billion annually in 2019.

The situation for media companies, while less dramatic compared to the effects on consultants and development firms, still points to a broader trend of reduced government spending on services provided by the media. However, the impact on these firms is much less pronounced, given their larger financial scale and diverse revenue sources.

DOGE’s Ongoing Efforts and Future Impact

Although DOGE’s efforts are still in the early stages, they have already touched about 10% of the named government agencies, with further cuts expected. As DOGE’s focus expands, particularly to the Department of Defense (DoD), the landscape of impacted companies could shift. The DoD's $850 billion budget is under scrutiny, with plans for potential cuts being discussed by both DOGE and Defense Secretary Pete Hegseth.

Some analysts, like Louie DiPalma from William Blair industrials, have noted that there is significant pressure in Washington to increase defense spending, which could complicate any cuts to the DoD’s budget. The final impact on companies involved in defense contracting remains uncertain as the debate over defense spending continues to unfold.

In total, DOGE is claiming savings of $55 billion from various initiatives, including fraud detection and workforce reductions. However, detailed accounting of these savings is still pending, leaving many questions unanswered about the full scale of the cuts and their long-term effects on the industries involved.