Federal Reserve to reduce its staff by approximately 10%

The Federal Reserve plans to reduce its systemwide workforce by about 10% over the next two years. The approach to achieving the goal will be to get a large number of employees to resign.

The decision was briefed to the staff by Fed Chairman Jerome Powell in a memo accessed by Bloomberg News. The main strategy to drive the reduction includes offering some employees the chance to voluntarily resign, which Powell said is similar to an initiative the central bank undertook in 1997.

"I have directed the leadership of the Federal Reserve, here at the Board and across the System, 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," Powell said in the memo.

"Over the next couple of years, our overall staffing level will decline by about 10% from today," the Fed chairman added.

Similarly, it was learned that the Fed will implement a deferred retirement program for Board of Governors staff who are fully eligible to retire as of Dec. 31, 2027.