Federal Reserve to Cut staff by 10 Percent
WASHINGTON – May 10, 2024 –
the Federal Reserve announced plans to cut its workforce by 10 percent, impacting nearly 2,500 positions. Under the leadership of Jerome Powell, the central bank revealed this measure, aiming to streamline operations amidst scrutiny and pressure for federal spending reductions. The plan relies on voluntary resignations, avoiding layoffs, signaling potential shifts in the institution. Read on to learn more about this evolution.
Federal Reserve Announces Plan to Reduce Staff by 10 Percent
The Federal Reserve, under the leadership of President Jerome Powell, is set to implement a plan to reduce its workforce by 10 percent. This initiative, communicated to employees, aims to streamline operations at the central bank, which currently employs approximately 24,500 individuals across the United States.
A 10 percent reduction translates to nearly 2,500 positions. However, the Fed intends to achieve this reduction through voluntary resignations, incentivized by what has been described as a “voluntary resignation program, to be encouraged through Buondi.” There are no current plans for layoffs.
External Pressures and Internal Dynamics
The announcement comes amid increasing pressure from various external sources, including calls for federal bodies to reduce staff and streamline their structures. While the Federal Reserve is theoretically independent of political pressure, it has faced scrutiny from various corners.
Elon Musk, head of the department for Government Efficiency (Doge), has been a vocal critic, often citing “excess of personnel and exorbitant costs.” Powell, however, has consistently defended the Fed’s staffing levels. In Febuary, he stated at the congress, Overworked, but not overstaffed,
using a play on words to emphasize that the staff is burdened with a heavy workload, rather than being excessive in number.
Powell Under Fire
Jerome Powell himself has been the target of frequent criticism, particularly from former President Donald Trump, who has publicly voiced his dissatisfaction with the Fed’s monetary policy. Trump has reportedly “threatened” to remove Powell from his position, seeking a monetary policy more aligned with his preferences.
The Fed’s Independence: A Balancing Act
The Federal Reserve’s independence is a cornerstone of its ability to manage monetary policy effectively.This independence allows the Fed to make decisions based on economic data and analysis, rather than political considerations. However, this independence is not absolute, and the Fed remains accountable to Congress and the public.
