Federal Reserve to reduce staff by 10%
Add Axios as your preferred source to
see more of our stories on Google.
The Federal Reserve building in Washington, DC. Photo: Samuel Corum/Bloomberg via Getty Images
The Federal Reserve system plans to reduce its staff count by 10% over the coming years, primarily through attrition, its leader told employees in an internal memo Friday.
Why it matters: The Fed is structured to be independent from the executive branch, but the nation's central bank is taking cues from the anti-bureaucracy political winds in Washington.
- The staff reductions will apply to both the Federal Reserve Board in Washington, with about 3,000 employees, and the 12 reserve banks scattered around the country, with another 21,000 staff.
- The Fed must pursue ""a careful and responsible steward of public resources," chair Jerome Powell said in the internal memo, which was first reported by Bloomberg.
What they're saying: "I have directed the leadership of the Federal Reserve… 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 wrote.
- He notes that "experience here and elsewhere shows that it is healthy for any organization to periodically take a fresh look at its staffing and resources."
- He said that the Fed will offer a voluntary deferred resignation program for retirement-eligible employees, as the central bank also did in 1997.
State of play: The Trump administration has pursued large-scale staffing reductions across the federal government. But the Fed has a unique structure in which its leaders are appointed to terms that cross presidential administrations, and it sets its own budget, funded with earnings from its operations.
- Still, the central bank aims to be responsive to government-wide policy shifts.
- In January, asked about whether the Fed would respect Trump's executive orders around diversity policy, Powell said that "as has been our practice over many administrations, we are working to align our policies with the executive orders as appropriate and consistent with applicable law."
Of note: In the memo, Powell notes that the Fed has, in the past, sought to rethink its staffing when the environment has changed, including "when there have been government-wide efforts to improve efficiency, like in the 1990s and now."
