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

The Federal Reserve will look to cut back its headcount by 10% over the subsequent couple of years, together with providing deferred resignation to some older workers, central financial institution Chair Jerome Powell mentioned in a memo.

“Expertise right here and elsewhere reveals that it’s wholesome for any group to periodically take a recent have a look at its staffing and sources. The Fed has carried out that occasionally as our work, priorities, or exterior setting have modified,” Powell mentioned within the memo obtained by CNBC.

The central financial institution chief added that he has instructed leaders all through the Fed “to seek out incremental methods to consolidate features the place applicable, modernize some enterprise practices, and make sure that we’re right-sized and capable of meet our statutory mission.” One methodology for shrinking the workers can be to supply a voluntary deferred resignation program to workers of the Federal Reserve Board who could be absolutely eligible to retire on the finish of 2027.

The central financial institution mentioned in its 2023 annual report that it had just below 24,000 workers. A ten% discount would deliver that quantity beneath 22,000.

The memo comes because the Trump administration has pushed for value cuts throughout civil service businesses, spearheaded by Elon Musk and the so-called Division of Authorities Effectivity. Musk has beforehand referred to as the Fed “absurdly overstaffed.” Powell’s memo didn’t point out Musk or DOGE as an element within the determination to shrink headcount.

The deliberate workers cuts had been first reported by Bloomberg Information.

— CNBC’s Matt Cuddy contributed reporting.