Booz Allen CEO says 7% of employees to be laid off

McLean-based Fortune 500 management consulting business Booz Allen Hamilton will lay off 7% of its 35,800-employee workforce, mainly in its civil division, Chairman, CEO and President Horacio Rozanski said Friday during an earnings call.

That works out to about 2,500 employees.

Noting that there has been a “slowdown in the civil procurement and spending environment” recently in the federal government, Rozanski said that five of Booz Allen’s major civil technology contracts’ run rates were reduced in April. Meanwhile, a major Veterans Affairs tech contract ended in the last fiscal year.

The loss of the VA contract and the reduction in run rates for the other five contracts are expected to lower Booz Allen’s consolidated top line by 6% in fiscal 2026, Rozanski said.

“As a result of these factors, year-over-year revenue in civil was flat in the fourth quarter, and we now anticipate that our civil business will see a revenue decline in the low double digits in FY26,” he said. “However, we do anticipate our civil business will rebound, as a number of big transformation and efficiency initiatives for our civil customers are already beginning to take shape.”

The layoffs, which will be “heavily concentrated” in Booz Allen’s civil division, will take place during the business’s first quarter, which ends June 30, Rozanski said during the call. He did not specify how many people based in Virginia will be impacted by the layoffs, although some of the civil sector’s leaders are based in Northern Virginia. A spokesperson for the company did not immediately respond to a request for comment Friday.

Despite the challenges in Booz Allen’s civil sector, the company recently won three contracts from the National Geospatial-Intelligence Agency and the Air Force totaling $1.2 billion, and its qualified pipeline for fiscal 2026 is $53.4 billion — a decrease from fiscal 2025 but higher than the pipeline was in fiscal 2024, Rozanski said.

Kristine Martin Anderson, Booz Allen’s chief operating officer and executive vice president, said that the federal government has reviewed the “vast majority” of the company’s civil projects as part of a government-wide reassessment of spending.

“We weren’t targeted in those reviews,” Anderson said during the earnings call. “What we saw was agencies and departments looking at their full portfolio with targets in mind, whether it was on or off the [General Services Administration] list. This is really agency-driven.”

Rozanski noted that federal procurement “slowed down significantly” after President Donald Trump took office in January because many sub-Cabinet level positions had not yet been filled, “and people were waiting to see what the specific agendas were. Now that those are beginning to get flushed out, we’re getting strong indication that because our tech works … we’re gonna see growth in the second half” of 2025.

Booz Allen announced Friday that its fiscal 2025 total revenue was up 12.4% year-over-year, reaching $12 billion, with $4.17 billion in civil division revenue, up from $3.83 billion in fiscal 2024. However, in the first three months of 2025, civil revenue was at $989 million, slightly down from the same quarter in 2024, when the company reported $992 million in civil revenue.