The Federal Reserve plans to shrink its workforce by about 10% over the approaching years, bringing the central financial institution in step with President Trump’s broader efforts to streamline the federal authorities, in accordance with a memo that Fed Chairman Jerome Powell despatched to employees on Friday.
Within the inside memo, a replica of which was seen by Reuters, Powell stated that he has directed Fed management to seek out “incremental” methods to trim operations, with a objective of shrinking the Fed’s roughly 24,000 particular person headcount nationwide by about 10% over “the next couple of years.” The memo was first reported by Bloomberg.
As a part of that effort, the Fed plans to supply a voluntary deferred resignation program to board employees in Washington who can be eligible to retire on the finish of 2027. The memo made no point out of any involuntary cuts or layoffs.
“Experience here and elsewhere shows that it is healthy for any organization to periodically take a fresh look at its staffing and resources,” Powell wrote within the memo, noting the Fed beforehand made related modifications within the Nineteen Nineties when President Invoice Clinton sought to scale back the dimensions of the federal authorities.
“I believe it is time to do it again, in that same conscientious and deliberate spirit,” Powell added.
Within the memo, Powell didn’t present many particulars on how the Fed might revamp efforts, however emphasised any modifications would prioritize the Fed’s mandates and statutory obligations, and be sure that its work stays “high quality, nonpolitical and mission-focused.”
The brand new Fed initiative comes as Trump has launched an aggressive effort to downsize and reshape the US authorities through billionaire adviser Elon Musk’s Division of Authorities Effectivity, or DOGE.
Whereas the Fed doesn’t have its price range set by Congress and doesn’t report on to the White Home, Powell stated the central financial institution should be a “careful and responsible steward of public resources.”
Powell gave a nod to the broader Trump-led effort by noting that the Fed typically pursues cuts of its personal “when there have been government-wide efforts to improve efficiency, like in the 1990s and now.”
