• OracleIt provides software software from among a group of technology companies The Ministry of Defense contracts have been reduced as a result of reducing the collective spending of the Trump administration and reducing the workforce. Technology Company ToneThe government contract was also terminated, and earlier this month was warned of the negative financial repercussions of the loss of the contract.

Oracle is one of the latest technology giants affected by comprehensive discounts of government contracts.

Defense Minister Beit Higseth announced last week that the administration will reduce $ 580 million of financing, grants and contracts – which leads to companies dealing with the Pentagon.

These discounts targeted the Civil Civil Resources Management System for Defense – a program for employee management – as well as diversity, shares and integration programs, as well as climate change and Covid’s research line elements.

The Dchrms initiative depends on Oracle Software. Consider through contracts and defense sites, Bloomberg Oracle, in addition to the Levos Defense and Engineering Company, is identified, as is the case among the companies affected by the termination, I mentioned the port Friday.

“This program was aimed at simplifying a large part of the old human resource technology stack (HR) – a task that we still need to achieve – but investing in the Dchrms project will cast more taxpayer money after badly,” Higseth said on March 20. note.

He added that the human resources project was late after six years – with the need for two other years in order for the program to be operated – and more than 280 million dollars on the budget.

Oracle and the Ministry of Defense did not respond luckComment requests.

Ministry of Defense Oracle gave She said the Human Resources Management Program in 2019, and the company said at the time its technology in more than 500 governmental organizations.

The main discounts of spending are part of the ongoing efforts made by the departments of President Donald Trump and the Ministry of Government Efficiency led by Elon Musk to reduce the strength of the federal workforce and eliminate what the administration says is waste of spending. The government has spent on 759 billion dollars on contracts In the fiscal year 2023, including $ 456 billion from the Ministry of Defense, according to the accountability office of the United States government.

More than half the allocations of the Ministry of Defense contracts For servicesIncluding professional support, management and logistics. Musk private companies have benefited from these contracts, receiving At least 20 billion dollars From the federal government.

Early guide on technology companies

The collective termination of government contracts with private sector companies can have a meaningful economic impact. According Federal contracts have lost As a result of Dog’s reviews. Federal services constituted about 8 % of the international accessory revenue in the fiscal year 2024, according to the CEO Julie Spellman Sweet.

“As you know, the new administration has a clear goal for the federal government management more efficiently,” Sweet told investors in a profit call. “During this process, many new purchasing procedures have slowed, which negatively affects our sales and revenues.”

After the call, the Accenture shares sank more than 7 %.

Some experts have already begun to warn of the broader economic impact of these cancellation contracts. Investor Danny Moussa, who expected the 2008 stock market collapse, argued that the markets have not yet been affected by the impact of private sector contracts.

Musa He said luck Last week, companies with government contracts will start changing how to make trade decisions, including employment, based on discounts. He added that with more federal workers who are looking for jobs, they may find fewer private sector opportunities as a result of the contract losses, which contributes to an “medium cycle”.

Moussa said: “It is not so simple,” We believe that there is fraud, let’s cut off the waste, let’s cut the expenses. ” It is related to contracts with the private sector. “

This story was originally shown on Fortune.com

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2025-03-28 17:39:00