The U.S. Federal Reserve is preparing to cut its workforce by roughly 10% in the coming years, aligning with broader efforts to streamline government operations. This plan was outlined in an internal memo from Chair Jerome Powell to staff.

In the message, Powell stated that senior leadership has been asked to explore gradual ways to reduce the central bank’s workforce, which currently stands at about 24,000 nationwide. The goal is to achieve this reduction over the next couple of years through careful planning.

One part of the initiative includes a voluntary deferred resignation program for Board staff based in Washington, D.C., who would be eligible to retire at the end of 2027. The memo did not indicate that any layoffs or mandatory departures are planned.

Powell noted that it is beneficial for organizations to periodically reassess staffing and resource needs. He referenced similar actions taken in the 1990s during earlier government efficiency efforts, adding that the time is right for a renewed push in that direction.

While the memo offered few specifics on what changes might be made, Powell emphasized that any decisions would continue to support the Fed’s core responsibilities and maintain the high quality and nonpartisan nature of its work.

Although the central bank operates independently and is not funded through the congressional budget process, Powell underscored the importance of managing resources responsibly. He acknowledged that the Fed often seeks internal efficiencies during periods of broader government reform, citing both past and present initiatives as examples.