Federal Reserve will reduce staff by 10% in coming years, Powell memo says

Published: Friday, May 16, 2025 at 6:51 pm

Federal Reserve to Shrink Workforce by 10% in Coming Years

The Federal Reserve, the central bank of the United States, is planning a significant workforce reduction over the next few years, according to a memo from Chair Jerome Powell. The memo, obtained by CNBC, outlines plans to cut the Fed's headcount by 10%, impacting nearly 2,400 employees based on the bank's 2023 annual report.

Powell stated the move is part of a broader effort to "take a fresh look at its staffing and resources" and ensure the Fed is "right-sized" to meet its mission. The memo highlights the intention to consolidate functions, modernize business practices, and streamline operations.

One key strategy for achieving this reduction is a voluntary deferred resignation program. This program will be offered to Federal Reserve Board employees eligible to retire by the end of 2027. This approach aims to minimize disruption and allow for a smoother transition.

The announcement comes amidst calls for cost-cutting within government agencies. While the memo doesn't explicitly mention external pressures, it's worth noting that figures like Elon Musk have publicly criticized the Fed's staffing levels. The Trump administration has also advocated for similar measures across the civil service.

The Fed's workforce reduction is a significant move that reflects a broader trend of efficiency and cost-consciousness within government institutions. The success of this initiative will depend on the implementation of the voluntary resignation program and the effectiveness of the planned consolidation and modernization efforts.

BNN's Perspective: This move by the Federal Reserve appears to be a prudent step towards fiscal responsibility and operational efficiency. While any workforce reduction can be challenging, the voluntary approach and focus on modernization suggest a thoughtful approach. The Fed's ability to adapt and streamline its operations is crucial for maintaining public trust and effectively managing the nation's monetary policy.

Keywords: Federal Reserve, Jerome Powell, workforce reduction, staff cuts, voluntary resignation, cost-cutting, government efficiency, central bank, monetary policy, employee reduction, staffing, modernization, Trump administration, Elon Musk, Federal Reserve Board, retirement program, financial news, economic news, US economy

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