Booz Allen Hamilton Holding Corp. (BAH) experienced a significant decline in premarket shares on Friday following a disappointing fiscal 2026 outlook and the announcement of layoffs as a response to federal budget cuts. The consulting firm and government contractor, headquartered in McLean, Virginia, provided projections for adjusted earnings per share (EPS) between $6.20 and $6.55, alongside anticipated revenues of $12.0 billion to $12.5 billion. This falls short of analysts’ expectations surveyed by Visible Alpha, who estimated EPS of $6.92 and revenue of $12.82 billion.
During the earnings call, CEO Horacio Rozanski cited the Trump administration’s focus on budget reductions impacting contracts with civilian agencies. As a result, the company is undergoing a “restructure and reset” of its civil business, which includes cost-cutting measures and layoffs to align with anticipated demand shifts. Chief Financial Officer Matt Calderone indicated that the firm is planning to reduce its workforce by about 7% in the first quarter, primarily targeting the civil segment. This could translate to approximately 2,500 job cuts, as Booz Allen had around 35,800 employees as of March 31.
For the fourth quarter, Booz Allen reported an adjusted EPS of $1.61 on revenue of $2.97 billion, marking a 7% increase year-over-year; however, this also fell slightly short of analysts’ projections of $1.61 EPS and $3.03 billion in revenue. The company’s shares were down more than 12% about 30 minutes before the market opened, even though they had remained relatively stable since the beginning of the year.
Despite the current challenges, Booz Allen’s defense and intelligence segments are expected to see continued growth, offering a glimmer of hope for the company amidst restructuring efforts. These segments may help offset the impacts felt from the layoffs and provide a pathway for future recovery.