Federal Reserve Plans 10% Reduction in Workforce
The Federal Reserve announces a strategic plan to reduce its workforce by 10% amid evolving policy landscapes.
The Federal Reserve of the United States has announced plans to reduce its workforce by 10% over the coming years, as communicated by its chair in an internal memo released on Friday.
This reduction will affect both the Federal Reserve Board in Washington, which employs approximately 3,000 staff members, and the 12 regional reserve banks across the country, which collectively employ around 21,000 individuals.
Chair Jerome Powell indicated in the memo that the Federal Reserve must pursue a 'prudent and responsible management of public resources.' He noted that 'experience here and elsewhere shows that it is healthy for any organization to periodically take a fresh look at its staff and resources.'
To facilitate this reduction, the Federal Reserve will introduce a deferred voluntary retirement program for eligible employees, similar to a program enacted in 1997.
The initiative comes on the heels of attempts by the previous Trump administration to implement widespread reductions in the federal workforce, although the Federal Reserve operates under a unique structure that allows its leadership to be appointed for terms that extend beyond presidential administrations, and it manages its own budget independently, relying on profits from its operations.
Despite its structural independence, the central bank is responsive to shifts in governmental policies.
In January, when Powell was asked about the Federal Reserve's adherence to Executive Orders issued by Trump concerning diversity policies, he affirmed that the Federal Reserve would align its policies with those orders as long as they are consistent with prevailing laws.
Powell has also pointed out that the Federal Reserve has historically sought to reassess its staffing in response to changing environments, citing past efforts during government-wide efficiency improvements in the 1990s and currently.
The Federal Reserve is designed to operate independently of the executive branch, yet it remains attuned to increasing political pressures advocating for bureaucratic reductions in Washington.
This reduction will affect both the Federal Reserve Board in Washington, which employs approximately 3,000 staff members, and the 12 regional reserve banks across the country, which collectively employ around 21,000 individuals.
Chair Jerome Powell indicated in the memo that the Federal Reserve must pursue a 'prudent and responsible management of public resources.' He noted that 'experience here and elsewhere shows that it is healthy for any organization to periodically take a fresh look at its staff and resources.'
To facilitate this reduction, the Federal Reserve will introduce a deferred voluntary retirement program for eligible employees, similar to a program enacted in 1997.
The initiative comes on the heels of attempts by the previous Trump administration to implement widespread reductions in the federal workforce, although the Federal Reserve operates under a unique structure that allows its leadership to be appointed for terms that extend beyond presidential administrations, and it manages its own budget independently, relying on profits from its operations.
Despite its structural independence, the central bank is responsive to shifts in governmental policies.
In January, when Powell was asked about the Federal Reserve's adherence to Executive Orders issued by Trump concerning diversity policies, he affirmed that the Federal Reserve would align its policies with those orders as long as they are consistent with prevailing laws.
Powell has also pointed out that the Federal Reserve has historically sought to reassess its staffing in response to changing environments, citing past efforts during government-wide efficiency improvements in the 1990s and currently.
The Federal Reserve is designed to operate independently of the executive branch, yet it remains attuned to increasing political pressures advocating for bureaucratic reductions in Washington.
