DOGE Cuts Affect Spending on Consulting in all Commercial Sectors
- Kennedy Editorial
- Sep 16
- 3 min read
Updated: Sep 17
By Tom Rodenhauser, Managing Partner at Kennedy Intelligence, Host and Editor at Consultants Talk Podcast and Newsletter
The sell-off of Accenture after losing $700 million in federal contracts to the DOGE’s slash-and-burn approach reinforces how exposed some major consulting firms are with the US federal government.
The subsequent headlines focus on how a handful of other firms – Booz Allen and Deloitte being the most prominent – would also be feeling the effects. There is a larger story here, one that affects the entire consulting industry, even firms with no public sector practices.
Set aside what government spends on consulting for its own agencies and operations. When we measure consulting spending across all sectors, it becomes obvious that the government plays an indirect role in virtually the entire ecosystem. A recent Wall Street Journal article cited an analysis that almost 60% of the corporate earnings generated between 2022 and the third quarter of 2024 can be attributed to public-sector spending and investment.
While the US is in the crosshairs, in almost any developed country, government grants and funding flow directly and indirectly through every vertical industry – from healthcare providers and pharmaceutical companies, to manufacturing and supply chain operations, energy and utilities and financial institutions.
Consultants naturally follow that money as recipients of discretionary spending. As I said previously, turning off the spigot will clearly hurt those firms with significant public sector practices, large and small firms alike. However, the rest of the consulting industry should brace to feel the impact as federal cutbacks indirectly extend into other sectors.
Gleeful overseers of government contracts seemed to relish knocking the big firms down a peg, stating that consultants would need to jettison their PowerPoint decks and justify their work in language that “a 15-year-old would understand.”
Forget for a moment that these days most 15-year-olds seem to communicate via emojis (and apparently so do some government officials!). It’s actually quite easy to explain the work being conducted by most consulting firms under federal contracts. They’re almost always very technical and related to specific tasks. In other words, less than 10% of government consulting engagements would be characterized as extraneous.
If federal austerity remains the norm, DOGE Cuts Affect Spending on Consulting will become more visible in corporate budgets, forcing firms to recalibrate how they pitch, price, and deliver their services.
Does the same hold true with commercial clients? We’re about to find out very quickly.
About the Author: Tom Rodenhauser has been tracking the global consulting industry for 30 years. Kennedy Intelligence helps leaders adapt to changing landscapes and position their firms for success. Reach out to discuss:
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Note: This article is for educational and informational purposes only and does not constitute investment, tax, or legal advice. The views and opinions expressed in this article are those of the author and do not represent the views of any affiliate organization. Any opinions or views expressed are as of the date written and are subject to change without notice and may be updated or modified at any time.
