What Led to Navy Secretary John Phelan Losing His Job? What We Know

Navy Secretary John Phelan was out of a job on Wednesday as reporting indicates that President Donald Trump wanted a change, citing slow shipbuilding times in the midst of an Iran war and a blockaded maritime shipping channel.

Phelan’s exit was made public by Pentagon spokesman Sean Parnell, who said Wednesday in a post on X that the secretary and former businessman was “departing the administration, effective immediately.” Defense Secretary Pete Hegseth, who has been reported to have forced Phelan’s hand, has not publicly remarked on the ousting.

“On behalf of the Secretary of War and Deputy Secretary of War, we are grateful to Secretary Phelan for his service to the Department and the United States Navy,” Parnell said. “We wish him well in his future endeavors.”

Navy Under Secretary Hung Cao, a combat veteran with over 25 years’ experience, is now the acting secretary. He previously ran as a U.S. House and Senate candidate in Virginia, failing in both political pursuits.

It was a short tenure as secretary for Phelan, who was chosen for the job in 2024 by President Donald Trump and later confirmed with bipartisan support by a vote of 62–30 on March 24, 2025.

Prior to being confirmed, Phelan was a big Trump and GOP donor. Federal Election Commission records showed that during Trump’s 2024 campaign, Phelan donated $834,600 to the now-president’s joint fundraising committee. He donated another $93,300 on Nov. 10, 2024, days after Trump’s big victory.

Criticism towards Phelan’s appointment largely centered on his lack of a military background. While not mandatory or completely unusual, he became the first Navy secretary since 2006 to be appointed and not have any such experience.

His background was in business, working as an investment banker and chair of Rugger Management LLC, an investment firm he founded. Prior to that, he co-founded and was managing partner of MSD Capital, the private investment firm for Michael Dell, founder and CEO of Dell Technologies.

“John will be a tremendous force for our Naval servicemembers, and a steadfast leader in advancing my America First vision,” Trump said prior to Phelan's confirming hearing. “He will put the business of the US Navy above all else.”

Trump Wanted Hegseth to Fire Phelan: Reports

Phelan’s exit has resulted in questions about what led to his departure, including whether or not he had any final say in potentially keeping his job, and if he went up the chain of command—including to Trump himself—to find out his fate.

Military.com asked the Pentagon and Navy whether Phelan was fired by Pete Hegseth, or left the job on his own volition.

A Navy spokesperson deferred comment to the Office of the Secretary of Defense. An OSD official told Military.com that it had no further comment to add to what Parnell posted on Wednesday.

Reporting from CNN claims that Phelan did not resign but instead was fired by Hegseth, with reporting indicating that Trump found Phelan’s leadership unsatisfactory—notably when it came to shipbuilding, of which Phelan had no prior experience before taking on the Navy role.

CNN, citing multiple sources, described months-long “tension” between Phelan and Hegseth that came to a head on Wednesday, which was Phelan’s last day. Trump’s frustration boiled over, according to a senior White House official, which led to him telling Hegseth to get rid of Phelan and hire someone who could more swiftly build ships.

That led to Hegseth reportedly informing Phelan that he needed to resign or be fired. But Phelan, according to CNN, didn't believe the request came from Trump, causing him to phone various officials to get additional information and confirmation that Trump OK'd the decision. That was when Parnell reportedly put out his statement on social media.

The “Trump Class” battleships were “a major source of frustration” for Hegseth and Deputy Secretary Stephen Feinberg as they did not serve the Pentagon’s broader strategy to pivot toward smaller, cheaper uncrewed ships, according to Politico, citing two anonymous sources—including one who noted the billion-dollar price tags and the ships being “not at all aligned with where Hegseth and Feinberg want to go.”

Phelan seemingly did not see his exit coming, according to the Associated Press. The now former secretary was fraternizing with sailors and industry professionals on Tuesday at the Navy’s annual conference in Washington.

A note from his own office described hosting lawmakers from the House Armed Services Committee to discuss the Navy’s annual budget request and efforts to build more ships.

Ousting in Middle of Iran War

The timing of Phelan’s exit comes at a volatile time, notably as the weeks-long blockade in the Strait of Hormuz has thrown a major wrench into the United States’ military operations in Iran.

The strait, a global maritime chokepoint that acts as a transfer lane for roughly 20% of the world’s oil, has become arguably Iran’s best defense while the nation itself has been bombarded by U.S. forces.

Phelan is also not the first major U.S. official to leave his post since the U.S. and Israel launched their war in the Middle East on Feb. 28. While not a top military official like Phelan, Gen. Randy George was relieved of his duties by Hegseth —who has fired multiple top generals, admirals and defense leaders since becoming secretary in 2025.

On the Navy side, Hegseth fired both Adm. Lisa Franchetti, the Navy’s top uniformed officer, and Gen. Jim Slife, the No. 2 leader at the Air Force, in February.

Trump fired Gen. Charles “CQ” Brown Jr. as chairman of the Joint Chiefs of Staff.