Has the army’s reduction of force plan hindered its strategic and operational capabilities?

Ok, so the Army is cutting 40k troops (I’m assuming that about 10k are officers and senior NCOs) from the ranks while the demands imposed upon the organization (applies to the other sister services as well) is rapidly increasing. However it needs to contract civilians to perform the very same staff and planning functions that the soldiers they are separating do it- to include sensitive/compartmental ones. Wouldn’t it be better to keep those folks in the service? Perhaps the army is handicapped when it comes to talent management. I just find it interesting how they get rid of personnel on one side and then contract cheap labor on the other side. Note: I’m totally aware of the budgets cuts imposed by the congress and how it affects the services.