Mass job cuts at the Ministry of Defence are being determined by short-term cost-cutting not long-term military needs, MPs warned on Friday.
In a critical report, the Public Accounts Committee said plans to reduce the civilian workforce by 29,000 and military personnel by 25,000 were being pushed through without a proper understanding of what skills would be required in the future.
While the move will save £4.1bn by 2015 it could also fuel spending on outside consultants, which has already soared from £6m to £270m in just four years, the MPs warned.
But they said they were encouraged by the MoD's attempts to tackle poor staff morale, which it had acknowledged was "not in a good place" as a result of the changes.
Margaret Hodge, who chairs the committee, said: "The Ministry of Defence has gone ahead with cuts to its military and civilian workforce without a proper understanding of what skills it will need in the future.
"We recognise that the MoD must make tough financial decisions if it is to reduce its spending by 7.5% a year by 2015, and that it has acted decisively.
"But we are concerned that these cuts have been determined by the need to cut costs in the short term rather than by considering the MoD's strategic objectives in the long term and the skills it will need to deliver them successfully.
"If the department loses key skills, it may have to spend even more money on replacing them, perhaps by buying them in from external consultants.
"Spending on consultants is already soaring, from £6m in 2006-07 to £270m in 2010-11. This would not represent value for money.
"We welcome the department's candour about how these cuts are affecting staff morale. That morale is low when jobs are threatened is unsurprising, but it is encouraging to see the department take active steps to improve the way it communicates with its staff on the need for change."
The MoD was ordered to cut annual spending by 7.5% in real terms by 2015 as part of the government's deficit reduction plans.
MPs said that while future priorities had been set out in the Strategic Defence and Security Review in 2010, the job cuts were going ahead before detailed operating plans had been finalised.
Shadow armed forces minister Kevan Jones said: "This is a damning condemnation of the Government's reform programme.
"The rushed defence review put savings before strategy with damaging consequences.
"Ministers' decisions mean the MoD is losing key skills, morale is in freefall and taxpayers' money is being wasted.
"It is hard to believe Philip Hammond's boast to have balanced the budget when he is overseeing mass redundancies which are resulting in waste and loss of important capability.
"Just weeks after a humiliating U-turn on aircraft carriers corroded confidence in the Government's handling of the equipment programme, this will end any assurance that ministers' reform programme was well planned or successful."
Defence Equipment Minister Peter Luff said the committee's warning over spending on consultants amounted to "a serious distortion of the facts".
Luff said: "The MoD's financial black hole was such a threat that we had to get on with reducing our civilian headcount.
"We had to make tough decisions to get our finances back into balance and this included a plan to reduce the Civil Service by 32,000 by 2020 to ensure we can deliver more resources to the front line. We are now transforming Defence to create a smaller, more efficient, professional Ministry of Defence that is back in balance.
"It is a serious distortion of the facts to say that expenditure on consultancy at the MoD has risen. Tough action has been taken to reduce the amount we spend on consultants, which has been reduced from £106m under the previous government to £26m in the last year.
"It seems the Public Accounts Committee has misunderstood what the Framework for Technical Support (Fats) is all about. All work commissioned under Fats is vital to the successful delivery and support of military equipment to our troops.
"This is often technical assistance for services the MoD cannot legally conduct in-house, such as independent air-worthiness certification."