Federal Reserve Chair Jerome Powell Says Agency Will Cut 10% Of Staff

Forbes

16-05-2025

The Federal Reserve aims to cut 10% of its workforce over the next several years, Chair Jerome Powell told employees in a memo, according to multiple reports—following suit with the Trump administration's efforts to reduce the size of the federal workforce despite the agency's independence from the executive branch.
US Federal Reserve Chairman Jerome Powell speaks during the Thomas Laubach Research Conference at ... More the William McChesney Martin Jr. Federal Reserve Board Building in Washington, DC, May 15, 2025.(Photo by JIM WATSON/AFP via Getty Images)
The Federal Reserve will 'take a fresh look at staffing and resources' to find ways to consolidate responsibilities and modernize operations to 'ensure that we are right-sized and able to meet our statutory mission,' Powell reportedly said in the memo, viewed by Bloomberg, which was first to report the news.
The Fed aims to achieve the 10% reduction in staff, which would amount to about 2,000 employees, in part through deferred resignations for employees eligible for retirement.
The reductions will be spread across the 3,000 employees in Washington and 21,000-some other staff in the 12 reserve banks throughout the country.
While the Trump administration has implemented widespread layoffs through the Elon Musk-led Department of Government Efficiency, the Federal Reserve is independent from the executive branch and is not obligated to follow the president's orders.
In the memo, Powell reportedly noted the Federal Reserve has a history of aligning with broader political shifts in Washington, including 'when there have been government-wide efforts to improve efficiency, like in the 1990s and now.'
Forbes has reached out to the Federal Reserve.
Trump, who appointed Powell in 2017, has warred with him for years as Powell has made monetary decisions Trump has disagreed with. In recent weeks, Trump has attacked Powell and accused him of being too slow to lower interest rates. Trump has suggested he might try to remove Powell, though both the president and Powell have acknowledged he likely does not have the authority to do so. Powell's term as Federal Reserve chair ends in May 2026.
The Federal Reserve implemented a hiring freeze in February as DOGE began cutting the federal workforce. It also took some steps to scale back Diversity, Equity and Inclusion initiatives, including removing a DEI section from its website, in line with Trump's orders to eliminate DEI initiatives across the federal government, according to The New York Times. Powell said during a news conference at the time the moves were made 'to align our policies with the executive orders as appropriate and consistent with applicable law.' The Trump administration has gutted the federal workforce, laying off tens of thousands of federal workers and nearly shuttering some agencies. Courts have determined some of the firings were unlawful and have ordered thousands of employees to be rehired.
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