Federal Reserve to cut its workforce by 10% in coming years
3 minute readPublished: Friday, May 16, 2025 at 6:19 pm
Federal Reserve to Cut Workforce by 10% in Coming Years
The Federal Reserve, the central bank of the United States, is planning a significant workforce reduction, aiming to cut its staff by 10% over the next few years. This move, revealed in a memo from Fed Chair Jerome Powell to employees, is part of an effort to streamline operations and ensure the bank is "right-sized" to meet its mission.
The memo, reviewed by FOX Business, outlines a multi-pronged approach to achieve this reduction. It includes a voluntary deferred resignation program for eligible employees, similar to a program used in 1997. The Fed will also utilize attrition, allowing staff levels to decrease naturally as employees retire or leave. A hiring freeze is already in place.
Powell emphasized the importance of this initiative, stating that it's "healthy for any organization to periodically take a fresh look at its staffing and resources." He also mentioned plans to consolidate functions and modernize business practices.
This announcement follows criticism from figures like Elon Musk, who has publicly questioned the Fed's staffing levels and spending. Musk, who has called for a review of the Fed's spending, has previously described the central bank as "absurdly overstaffed." Powell has previously defended the Fed's staffing, stating that the bank operates with a "very careful budget process."
The voluntary deferred resignation program will be open to Federal Reserve Board employees eligible for full retirement by December 31, 2027.
BNN's Perspective: While workforce reductions can be a sensitive topic, the Fed's move appears to be a measured approach. The combination of voluntary departures, attrition, and a hiring freeze suggests a commitment to minimizing disruption. The focus on efficiency and modernization is a positive sign, especially given the evolving economic landscape. However, it's crucial to ensure that these cuts don't compromise the Fed's ability to effectively manage monetary policy and maintain financial stability.
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