Software Firms Brace for DOGE Disruption

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Software companies that sell to the government are closely watching the impact of cost-cutting efforts led by the Department of Government Efficiency (DOGE).

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Last week, the Pentagon terminated major contracts with Oracle and Leidos Holdings Inc., which provided HR technology and services for its 900,000 civilian employees. These cancellations highlight the financial risks for companies dependent on government contracts.

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In a note titled “Software in the DOG(E) House,” Morgan Stanley identified the firms most exposed to these cost-cutting measures.

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However, exposure does not necessarily mean a negative outcome for all companies.

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William Blair analysts suggested that the government's efficiency push could help Palantir secure more contracts, noting that a recent executive order for a centralized payment tracking system “seems earmarked for Palantir.”

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As the federal government tightens its belt, some companies are losing their seats at the table, while others are getting a bigger slice.