The Federal Reserve is planning to reduce the workforce at the central bank by 10% over the next few years, according to a memo reviewed by FOX Business.
Fed Chair Jerome Powell sent a memo on Friday morning to central bank employees to inform them of the plans, saying that “experience here and elsewhere shows that it is healthy for any organization to periodically take a fresh look at its staffing and resources.”
Powell said the Fed will work to “find incremental ways to consolidate functions where appropriate, modernize some business practices, and ensure that we are right-sized and able to meet our statutory mission.”
POWELL WARNS ECONOMY COULD FACE MORE FREQUENT ‘SUPPLY SHOCKS’
The workforce reduction program will also include a voluntary deferred resignation program, while a source familiar with the plan tells FOX Business that the Fed will also use attrition to reduce staffing levels in line with its goal. The central bank currently has a hiring freeze in place.
Powell said in his memo that the voluntary deferred resignation program will be open to Federal Reserve Board employees who are eligible for full retirement as of Dec. 31, 2027, similar to how the central bank handled its workforce reductions in a 1997 efficiency push.
“Board staff who are eligible for this program will receive an email with more specific information. This will provide new professional growth opportunities for our staff and help us remain well-prepared to carry out our important responsibilities in the years to come,” Powell wrote.
POWELL WARNS ECONOMY COULD FACE MORE FREQUENT ‘SUPPLY SHOCKS’
Powell’s memo informing Federal Reserve employees about the workforce reductions comes after Elon Musk’s repeated calls for his Department of Government Efficiency (DOGE) to examine the Fed’s spending.
Musk said earlier this month that DOGE should review the Fed’s spending on its headquarters renovation. Last year, Musk said that the “Fed has a crazy high number of employees,” and later said the central bank is “absurdly overstaffed.”
Powell pushed back on the assertions that the Fed’s workforce is bloated, saying it runs a “very careful budget process where we’re fully aware. We owe that to the public, and we do believe that.”
In congressional testimony earlier this year, Powell was asked if he thinks the Fed is overstaffed and replied, “No, I would say that, you know, overworked, maybe, not overstaffed. Everybody at the Fed works really hard.”
