The Blubber

Federal Reserve Chair Jerome Powell said in a memo that the central bank plans to reduce its workforce by about 10% over the next few years, including offering a deferred resignation option to some older employees.

“Experience here and elsewhere shows that it is healthy for any organization to periodically take a fresh look at its staffing and resources,” Powell wrote in the internal memo, which was obtained by CNBC. “The Fed has done that from time to time as our work, priorities, or external environment have changed.”

Powell said he has directed Fed leadership to identify ways to streamline operations, modernize certain practices, and ensure that the institution is appropriately staffed to meet its responsibilities. Part of the plan includes a voluntary deferred resignation program for Federal Reserve Board employees who will be eligible to retire by the end of 2027.

According to the Fed’s 2023 annual report, the system employed just under 24,000 people. A 10% reduction would bring staffing below 22,000.

The memo comes amid broader pressure from the Trump administration to reduce spending across federal agencies, an effort led by Elon Musk and the Department of Government Efficiency (DOGE). Musk has previously criticized the Fed as “absurdly overstaffed,” but Powell’s memo did not reference Musk or DOGE as influencing the decision.