Navy launches departmentwide organizational review that could reshape civilian workforce

The Department of the Navy has launched a sweeping, departmentwide organizational review that could lead to significant restructuring of its civilian workforce, including possible 5% to 20% reductions in total civilian personnel.

A Navy official told Federal News Network the service is “taking appropriate action to fully comply with the Secretary of War’s initiative to reform the federal workforce to support warfighters consistent with National Defense Strategy guidance.”

The official said the organizational review builds on earlier efforts by Navy Secretary John Phelan to consolidate and streamline the department and is designed to “provide a thorough analysis that will inform a final DON organization structure that focuses resources on warfighting excellence.”

As part of Defense Secretary Pete Hegseth’s Workforce Acceleration and Recapitalization Initiative — which instructed military services to conduct detailed analysis of their organizational structures —  Navy leaders briefed the results of their review to the deputy secretary of defense last May. The initiative documented ongoing Navy restructuring efforts and “identified opportunities for workforce shaping in fiscal 2026,” according to a Feb. 17 memo. 

“In concert with these early initiatives, I issued an update to the reference and directed the establishment, consolidation and streamlining of DON organizations, including the Offices of the Chief of Naval Intelligence, Chief of Naval Policy, Director of Administration, and Chief of Information. Further efforts are underway within the Secretariat, Navy and Marine Corps to redefine existing organizational structures and optimize the civilian workforce,” Phelan said in the memo.

“Based on initial efforts, as well as those currently underway, opportunity remains for additional reductions in specific areas as we finalize a departmental organization that will deliver warfighting readiness,” he added.

Phelan directed Assistant Secretary of the Navy for Manpower and Reserve Affairs Benjamin Kohlmann to lead the review, collect data across the department and propose a final organizational structure and billet alignment. An initial status report is due to the secretary of the Navy in March.

“We are currently in the analysis phase. This is a deliberate process, and we are committed to getting this right. No final decisions have been made. We will ensure Congress and our workforce are kept informed as the review progresses,” the Navy official said.

In a follow-on memo issued Feb. 18, Kohlmann said the review identified opportunities for additional reductions in specific areas, particularly within the Navy Secretariat and Budget Submitting Organizations across Echelons 1 through 4, and directed commands to prepare impact statements proposing potential staffing reductions at 10%, 15% and 20%.

“This review analyzes factors that would optimize organizational structure and eliminate functional redundancies to better support our Sailors and Marines. It is a data-driven effort to align our civilian structure with the National Defense Strategy and enhance the lethality of our force. The Secretary has directed a comprehensive analysis, and modeling a range of scenarios is a standard and prudent part of that process,” the Navy official said.

The Navy’s manpower office will provide “tools to support scenario-based courses of action, along with templates and data to support the analysis.” The office will soon issue formal tasking through ETMS2 and conduct recurring progress reviews to guide the organizational review toward a planned implementation deadline of Sept. 30, 2026.

“Enterprise Task Management Software Solution (ETMS2) tasking with respect to the scope and substance of this effort is forthcoming, along with a schedule for in-progress reviews that will ensure we remain on track to meet implementation timeline of 30 September 2026,” Kohlmann said in the memo.

The Navy official said any subsequent actions will be based on the results of the initial analysis.

It’s unclear when civilian employees will be notified whether their organizations or billets are affected. “This comprehensive review may inform future decisions regarding workforce reductions or structures to better support our warfighters. We are committed to a transparent process, and we will keep our workforce informed as we proceed,” the Navy official said.

Shrinking the size of the federal workforce has been a priority for the second Trump administration. Last year, Hegseth directed military departments to reduce civilian personnel by 5% to 8%, and more than 60,000 Defense Department civilians have since left the department.

A Pentagon press official told Federal News Network that the deferred resignation program remains an “available workforce shaping tool the DoN can use if it determines there is a need.”

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