Fed Slashes Workforce by 10% in Effort to Improve Efficiency and Modernize
Fed Chairman Powell aiming to remove every tenth post from the institution.
In a bid to boost efficiency and modernize, the Federal Reserve (Fed) is trimming its staff by approximately 10% over the coming years. Fed Chairman Jerome Powell announced this plan to employees in a memo, revealing that the central bank is offering incentives for voluntary departures.
Powell highlighted the need for a thorough review of the Fed's workforce and resources to continue carrying out its mission effectively. With nearly 24,000 employees, the potential number of layoffs would amount to around 2,400 jobs.
The Federal Reserve, an independent agency, is taking this step as part of a broader movement towards leaner operations, reflecting the current trend of streamlining government processes. This initiative is reminiscent of efforts spearheaded during the Trump administration to reduce bureaucracy. However, unlike other government agencies, the Federal Reserve generates its income through interest on securities and fees from affiliated banks, rendering it less dependent on political influence.
In a surprisingly conciliatory tone, Elon Musk, tech billionaire and informal advisor to the US government, earlier called the Fed "absurdly overstaffed." Despite his initial involvement in advocating for job cuts, Musk has since diverted his attention to his businesses, including electric car maker Tesla.
US President Donald Trump has publicly criticized Fed Chairman Powell, labeling him a "big loser" and an "idiot." Trump has also pressed for lower interest rates, citing the positive impact they would have on US companies' financing conditions. However, Powell has cautioned against hasty rate cuts, highlighting potential negative consequences.
[1] Efficiency and Modernization: The Federal Reserve Staff Reduction aims to improve operations through attrition, voluntary retirements, and modernization efforts.
[2] Jerome Powell's Role: As the Fed Chair, Powell has emphasized the need for these changes and is driving the initiative to modernize and streamline operations.
[3] Donald Trump's Influence: The broader government trend of reducing bureaucracy, initiated during the Trump administration, has influenced the Federal Reserve's decision to review its workforce and resources.
- Fed
- Layoffs
- Donald Trump
- Jerome Powell
In the context of the Federal Reserve's staff reduction, current US President Donald Trump's efforts to streamline government processes during his administration may have played a part in the Fed's decision to review its workforce and resources. In response to such calls for efficiency and modernization, Fed Chairman Jerome Powell is driving the initiative to instigate change among the Federal Reserve staff.
