In its 2023 annual report, the Fed reported 23,950 employees across the Fed system. The budget budget for 2024 increased to 24,553 people, an increase of approximately 2.5%.
The 10% cut suggests that nearly 2,500 workers from the Fed will span 12 local reserve banks. That would bring staffing levels closer to them 10 years ago.
The announcement comes as the Trump administration has put pressure on federal agencies to cut staff and streamline operations.
The Fed is an independent institution that does not rely on Congress to raise funds. Still, the central bank has been criticised by the government’s efficiency, or Elon Musk, who runs Doge.
Powell denied that the central bank is overstaffed. “I was overworked, not artificial, but overworked,” he said at a February council hearing. “Everyone at the Fed is working really hard.”
In a memo on Friday, Powell said the central bank was “a prudent and responsible public resource” and called system staff “our most valuable assets.”
The effort “will provide new professional growth opportunities for staff and help them stay well prepared to carry out our critical responsibilities over the next few years,” he said.
For years, the Fed’s revenue exceeded operating expenses, earning billions of dollars in profits to the government’s Treasury Department of Finance. But the opposite happened as interest rates rose: the Fed recorded operating losses in 2023 and 2024, forcing them to refrain from remittances to the Treasury.
The Fed is drawing masks attention, including its multi-year headquarters renovations. Reported reporting costs had risen to around $2.5 billion as of 2022. This is a figure that has been fixed at higher costs of building materials and labor since the project was launched in 2021, as inflation began to skyrocket.
Earlier this month, Musk called these costs “eyebrow lazers.”
In a report released earlier this year, Andrew Levin, a professor at Dartmouth University and a former special advisor to the central bank, said the number of Fed employees has increased significantly since 2010.
(Add additional comments from Powell Memo. Previous versions of this story have corrected the spelling of Dartmouth, making it clear which staff are eligible for the postponed resignation program.)
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