US Federal Reserve aims to trim staff by 10% in coming years

Pete Schroeder

Fri, May 16, 2025, 1:03 PM 2 min read

By Pete Schroeder

WASHINGTON (Reuters) -The Federal Reserve plans to shrink its workforce by astir 10% implicit the coming years, bringing the U.S. cardinal slope successful enactment with President Donald Trump's broader efforts to streamline the national government, according to a memo that Fed Chairman Jerome Powell sent to unit connected Friday.

In the interior memo, a transcript of which was seen by Reuters, Powell said that helium has directed Fed enactment to find "incremental" ways to trim operations, with a extremity of shrinking the Fed's astir 24,000 idiosyncratic headcount nationwide by astir 10% implicit "the adjacent mates of years." The memo was archetypal reported by Bloomberg.

As portion of that effort, the Fed plans to connection a voluntary deferred resignation programme to committee unit successful Washington who would beryllium eligible to discontinue astatine the extremity of 2027. The memo made nary notation of immoderate involuntary cuts oregon layoffs.

"Experience present and elsewhere shows that it is steadfast for immoderate enactment to periodically instrumentality a caller look astatine its staffing and resources," Powell wrote successful the memo, noting the Fed antecedently made akin changes successful the 1990s erstwhile President Bill Clinton sought to trim the size of the national government.

"I judge it is clip to bash it again, successful that aforesaid conscientious and deliberate spirit," Powell added.

In the memo, Powell did not supply galore details connected however the Fed whitethorn revamp efforts, but emphasized immoderate changes would prioritize the Fed's mandates and statutory obligations, and guarantee that its enactment remains "high quality, nonpolitical and mission-focused."

The caller Fed inaugural comes arsenic Trump has launched an assertive effort to downsize and reshape the U.S. authorities via billionaire advisor Elon Musk's Department of Government Efficiency, oregon DOGE.

While the Fed does not person its fund acceptable by Congress and does not study straight to the White House, Powell said the cardinal slope indispensable beryllium a "careful and liable steward of nationalist resources." Powell gave a motion to the broader Trump-led effort by noting that the Fed often pursues cuts of its ain "when determination person been government-wide efforts to amended efficiency, similar successful the 1990s and now."

(Reporting by Pete Schroeder; Editing by Will Dunham)