Federal Reserve Will Cut Staff By 10%

Published: Friday, May 16, 2025 at 8:25 pm

**Federal Reserve to Cut Workforce by 10% Over Several Years**

The Federal Reserve, the central bank of the United States, is planning to reduce its workforce by 10% over the next few years, according to a memo from Chair Jerome Powell. This move, reported by multiple news outlets, will impact approximately 2,000 employees across the Federal Reserve system, including staff in Washington D.C. and the 12 regional Federal Reserve Banks. The reduction will be achieved, in part, through attrition, such as deferred resignations for those eligible for retirement.

The decision comes as the Federal Reserve seeks to consolidate responsibilities and modernize operations, aiming to ensure it is "right-sized" to fulfill its mission. This initiative mirrors broader efforts to streamline the federal workforce, a trend that has been particularly pronounced under the Trump administration. While the Federal Reserve operates independently from the executive branch, Powell's memo reportedly acknowledged a history of aligning with broader political shifts in Washington, including efficiency drives.

This move follows a hiring freeze implemented in February and the scaling back of Diversity, Equity, and Inclusion (DEI) initiatives, aligning with Trump administration policies. The President, who appointed Powell in 2017, has been critical of the current Fed Chair, particularly regarding monetary policy decisions. Trump has publicly criticized Powell and suggested he might try to remove him, although both have acknowledged the president likely lacks the authority to do so. Powell's term as Federal Reserve chair is set to end in May 2026.

BNN's Perspective:

While the Federal Reserve's independence is crucial, it's understandable that they would consider efficiency measures. The move to reduce staff, especially through attrition, seems like a reasonable approach to adapt to changing economic landscapes and political pressures. However, it's important to ensure that these cuts don't compromise the Fed's ability to effectively manage monetary policy and maintain financial stability.

Keywords:

Federal Reserve, Jerome Powell, workforce reduction, staff cuts, attrition, monetary policy, Trump administration, efficiency, hiring freeze, DEI, Federal Reserve Chair, economic policy, central bank, layoffs, government efficiency, financial stability

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