The Pentagon announced his departure in a brief statement, saying he was leaving the administration “effective immediately.” But it did not provide a reason or say whether he decided to go.

His firing was first reported by Reuters.

The sources, who spoke on condition of anonymity, said ​Phelan was dismissed in part because he was moving too slowly to implement reforms to ⁠speed shipbuilding and because he had fallen out with key Pentagon leadership.

One source cited bad relationships with Hegseth, Hegseth’s ​deputy, Steve Feinberg, as well as the Navy’s No. 2 civilian, Hung Cao, who the Pentagon said will now take over ​as acting Navy secretary.

The source also cited an ethics investigation into Phelan’s office.

A billionaire seen as having close ties to President Donald Trump, Phelan is the first administration-picked service secretary to be fired since Trump came back into office last year.

His departure fits within a ​broader context of upheaval at all levels of leadership at the Pentagon under Hegseth’s watch, including the firing last year of ​the chairman of the Joint Chiefs of Staff, Air Force General C.Q.

Brown, as well as the chief of naval operations and ‌Air Force ⁠vice chief of staff.

On April 2, Hegseth fired Army Chief of Staff Randy George without citing a reason.

Two US officials said the decision was tied to tensions between Hegseth and Army Secretary Daniel Driscoll.

Senator Jack Reed, the top Democrat on the Senate Armed Services Committee, called Phelan’s dismissal “troubling.”

“I am concerned it is yet another example of the instability and dysfunction ​that have come to define ​the Department of Defence ⁠under President Trump and Secretary Hegseth,” Reed said.

The latest departure comes during a tense ceasefire with Iran, as the US flows more naval assets into the Middle East.

The US military is ​relying on naval assets to carry out a blockade of Iran, which President Donald Trump is ​hoping will ⁠pressure Tehran to negotiate an end to the conflict on his terms.

The Navy is under intense pressure to expand its fleet. China’s shipbuilding industry now dwarfs the US, which was once a global powerhouse.

Trump’s $1.5 trillion defence budget request for fiscal year 2027 includes ⁠over $65 billion ​to procure 18 warships and 16 support ships made by General Dynamics ​and Huntington Ingalls Industries.

It is part of what the Pentagon is calling the “Golden Fleet” initiative, which officials say is the largest shipbuilding request since 1962.