Federal Reserve will reduce staff by 10% in coming years, Powell memo says

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Federal Reserve will reduce staff by 10% in coming years, Powell memo says

U.S. Federal Reserve Chair Jerome Powell departs after holding a press conference following a two-day meeting of the Federal Open Market Committee on interest rate policy in Washington, D.C., U.S., May 7, 2025.

Kevin Lamarque | Reuters

The Federal Reserve will look to reduce its headcount by 10% over the next couple of years, including offering deferred resignation to some older employees, central bank Chair Jerome Powell said in a memo.

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

The central bank chief added that he has instructed leaders throughout the Fed “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.” One method for shrinking the staff will be to offer a voluntary deferred resignation program to employees of the Federal Reserve Board who would be fully eligible to retire at the end of 2027.

The central bank said in its

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that it had just under 24,000 employees. A 10% reduction would bring that number below 22,000.

The memo comes as the Trump administration has pushed for cost cuts across civil service agencies, spearheaded by Elon Musk and the so-called Department of Government Efficiency. Musk has previously called the Fed “

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.” Powell’s memo did not mention Musk or DOGE as a factor in the decision to shrink headcount.

The planned staff cuts were first reported by

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.

— CNBC’s Matt Cuddy contributed reporting.

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