U.S. Military Department will save $1 billion
U.S. Secretary of Defense Chuck Hagel announced the 20 % downsizing of employees who are at contracted service. Personnel changes will take effect from 2014. This will cut contracts with private companies, as well as the civilians. Hagel believes that the country needs to reduce costs and optimize staff, according to information provided by CNN Money.
Hagel said: «These cuts are only the beginning to reallocate the defense spending. U.S. need to place new strategic priorities». Thanks to these measures, the U.S. Army will save $1 billion in the period from 2014 to 2019.
Currently, the military department of the United States is subject to the law of sequestration, which was introduced in 2011. This legislation would reduce costs of Pentagon by $500 billion over 10 years. In the past fiscal year, the Ministry of Defence has managed to save $40 billion.
$1 billion is the unimportant amount in comparison with the planned $500 billion, however, Hagel insists that every dollar saved on headquarters may be invested in military actions if necessary.
U.S. Department of Defense is one of the largest federal agencies with a budget of $526 billion and 800 thousand civilian jobs.
