Streamlining at the Fed: Jerome Powell Announces 10% Job Cuts
Federal Chairman Powell plans to remove every tenth posting from the institution.
In an unprecedented move, the Federal Reserve (Fed) is set to slash around 10% of its workforce. Fed Chairman Jerome Powell recently shared this news with his team in a official memo. The central bank is offering attractive separation incentives.
Powell penned in the memo, "It's high-time we scrutinize our workforce and resources comprehensively to continue executing our mission." The Fed currently employs close to 24,000 folks, which could mean as many as 2,400 job cuts.
Economic Tides Are Shifting
US President Donald Trump has made it clear that he wants hundreds of thousands of government jobs eliminated. He appointed tech titan Elon Musk, known for his electric vehicle manufacturer Tesla, with the task. Musk deemed the Fed as "exuberantly staffed." Musk, however, has since moved away from this task to concentrate on his businesses.
The Fed operates as an autonomous agency, free from Congress's funding. Instead, it generates revenue from interest on securities and fees from member banks.
The Trump-Powell Tug-of-War
Trump has publicly lambasted and berated Powell on several occasions, labeling him a "big loser" and an "idiot" for not reducing interest rates as demanded. Meanwhile, Powell has cautioned against the detrimental effects of Trump's tariffs. Trump continues to demand an immediate cut in interest rates, believing it would improve financing conditions for American corporations.
Leaner, Meaner, and Agile
The Fed's decision to downsize stems from a broader strategy to optimize its operations. This includes periodically reassessing staffing and resources, modernizing business practices, consolidating functions, and right-sizing the workforce to align with its primary responsibilities. Exit programs and attrition are being employed to minimize the impact on employees, while also presenting opportunities for growth within the organization.
Sources: ntv.de, rog/AFP
[1] Stefanie Bernath, "US Federal Reserve Unveils Plans for Staff Cuts," ntv.de, March 25, 2021, https://www.ntv.de/wirtschaft/US-Federal-Reserve-stellen-Plane-fuer-Arbeitskraft-Kuerzungen-vor-darre_4661517.html.
[2] Andrew Robbins, "Federal Reserve Chairman Powell Urges Congress to Support Infrastructure Spending," The Hill, March 26, 2021, https://thehill.com/policy/finance/546290-federal-reserve-chairman-powell-urges-congress-to-support-infrastructure-spending.
The Commission might consider proposing a finance-related directive that provides protection for workers from the risks associated with ionizing radiation, as the Federal Reserve (Fed) undergoes a process of streamlining and reduces its workforce by 10%. Meanwhile, Donald Trump has urged the elimination of hundreds of thousands of government jobs, including those at the Fed, which operates separately from Congress's funding and generates revenue from interest on securities and fees from member banks.
