US Federal Reserve eyes workforce cut of 10% in next ‘couple of years’
The seal of the Federal Reserve Board. It is on display at the entrance of the William McChesney Martin Jr. Federal Reserve Board Building in Washington, DC. Alex Wong/Getty Images/AFP
WASHINGTON, United States — US Federal Reserve Chair Jerome Powell told staff on Friday that the bank plans to cut its workforce by around 10 percent in “the next couple of years,” according to a memo seen by AFP.
The bank’s announcement follows US President Donald Trump’s attempt to dramatically reduce headcount in the federal government. The Elon Musk-run Department of Government Efficiency spearheaded this move.
In a social media post earlier this year, Musk said that “The Fed is absurdly overstaffed.”
The Fed is an independent agency which does not rely on Congress for its funding. Instead, it makes money from interest on securities and fees charged to the banks it oversees.
“Experience here and elsewhere shows that it is healthy for any organization to periodically take a fresh look at its staffing and resources,” Powell told staff in the memo. Bloomberg News was first to report this.
The plans will include a “voluntary” deferred resignation program for eligible employees at the Federal Reserve Board in Washington, he said.
Federal Reserve to let go about 2,400 people
The Fed employed 23,950 people across the country in 2023, according to its most recent annual report. These include 3,000 employees at the Board and over 20,000 staff at its 12 reserve banks dotted across the country.
Using that figure, a 10 percent cut in headcount would translate to a loss of just under 2,400 people.
Powell said he directed the leadership of the Fed “to find incremental ways to consolidate functions where appropriate, modernize some business practices, and ensure that we are right-sized and able to meet our statutory mission.”
The deferred resignation program would “provide new professional growth opportunities for our staff and help us remain well-prepared to carry out our important responsibilities in the years to come,” he added.
