The Department of Defense should cut 58,000 civilian employees - and save about $5 billion in the process - by 2015 as part of efforts to deal with sequestration's on-going cuts, a high-level panel that includes former top military personnel determined.

The panel - which includes a former Air Force chief, a former Navy chief and two former vice chairmen of the Joint Chiefs of Staff - recommended $50 billion in cuts to help the Pentagon adjust to the second year of sequestration. The across-the-board cuts are expected to take $52 billion from Pentagon coffers next year and cause disruption to training, operations, maintenance and personnel.

The 17-member panel, writing on behalf of the Washington, D.C-based Stimson Center think tank, said targeted cuts would allow the Pentagon to survive the Congress-mandated reductions without "risking national security."

"A more prudent course would be to act now to prevent the disruptive effect of sequestration, along with reshaping the defense budget on the basis of a strategy that is designed to protect America's national security interests in the years ahead," panelists wrote.

The panel made 27 different recommendations. The biggest chunk of savings - about $22 billion - would come from reductions to personnel, particularly headquarter staffing and civilian workers. The panel recommends trimming 20 percent from headquarter staff- a move that's already under way - as well as the 58,000 reduction in civilian personnel.

DOD's contractor workforce should be pared down, too. The first step should be identifying the number of contractors - 2011's inventory showed about 710,000 - then reduce that number by at least 20 percent. The panel doesn't put a dollar figure on these savings as it said there's not an accurate count of existing contractors, a fact that's long been a point of contention in Congress.

Force cuts part of savings

Another $21.4 billion would come from a restructuring and reducing the force.

"These would maintain robust space, air, naval and special operations forces and expand investment in cyber capabilities, but reduce active forces best suited for protracted wars," panelists said, adding those types of conflicts should be avoided.

The biggest personnel drop is recommended for the Army, though panelists said other savings should prevent it from dropping to 380,000 soldiers as Secretary of Defense Chuck Hagel said could happen under sequestration. Instead, panelists recommend dropping the number to 450,000, a reduction of about a third from current levels. The cuts to the Army would save about $11.9 billion a year, according to the report.

Panelists also recommend cutting Marine end-strength to 160,000 from its current planned number of 182,100 a move away from active duty Air Force to the Reserve component and the increased use of unmanned aerial vehicles.

The panelists concede the reforms are not new and face "fierce bureaucratic and political obstacles," before they could be implemented. However, they added the cuts could be made while protecting U.S. interests.

"By implementing all these changes, not only could the required reduction be met, but the defense budget could be put on a healthy path," they wrote.