Federal Reserve Plans Job Cuts

The Federal Reserve is gearing up to trim its workforce by around 10% in the coming years, aligning itself with President Trump’s push to streamline the federal government. This information comes from an internal memo circulated to staff on Friday.

In the memo, which was revealed by Reuters, Powell instructed Fed leadership to adopt a “gradual” approach to reduce the existing 24,000 staff. It appears the aim is to achieve this by cutting about 10% of positions over the next few years. Bloomberg was the first to report these details.

To facilitate this, the Fed plans to introduce a voluntary resignation program aimed at eligible Washington board staff nearing retirement by the end of 2027.

Powell emphasized the importance of reviewing staffing and resources regularly, suggesting that organizations benefit from such evaluations. He referenced efforts made during President Bill Clinton’s administration in the 1990s, where similar cuts were made to reduce the size of the federal government.

“It seems like a good time to revisit this with intention,” Powell noted.

Specifics on how the Fed will proceed with these changes remain scarce, but Powell mentioned a focus on maintaining high-quality operations that are apolitical and centered on the mission.

This fresh initiative from the Fed emerges as Trump intensifies his endeavors to reshape government structures, with notable involvement from billionaire advisor Elon Musk through the Office of Government Efficiency.

Although the Fed operates independently of a congressional budget and doesn’t answer directly to the White House, Powell asserted the necessity for central banks to exercise prudence and responsibility regarding public resources.

He acknowledged the collaborative spirit illustrated by broader government efficiency drives in past decades, indicating that such efforts, including now, benefit the organization.