Trimming Down the Central Bank: 10% Job Cuts Planned at the Fed Under Powell
Fed Chair Powell Proposes Deleting One Out of Ten Posts from the Federal Reserve's Output
Fed up with excess employees at the Federal Reserve (Fed), tech mogul Elon Musk shared his concern publicly. Seems like Fed Chair Jerome Powell agrees, as he announced a plan to shedding some staff in a memo to employees.
The Federal Reserve is considering reducing its workforce by approximately 10%. This move comes as a part of an endeavor to update its operations, consolidate functions, and maintain an efficient team size to fulfill its objectives into the future.
Currently, the Fed employs around 24,000 individuals, which equates to potential losses of around 2,400 jobs. To achieve this reduction, incentives for voluntary separations are being offered, and a hiring freeze has been implemented.
The president of the United States, Donald Trump, has made it clear he wants to slash jobs in government departments. He delegated the task to Elon Musk, who called the Federal Reserve "unnecessarily overstaffed." Although Musk has since stepped back from this mission to focus on his technological ventures like Tesla, the Fed's decision seems to be in line with Trump's aim.
This downsizing of the Federal Reserve mirrors a broader trend of job reductions in the federal sector. Agencies are cancelling contracts and grants, leading to a decline in federal employment that includes contract and grant workers. For instance, the Environmental Protection Agency axed $1.7 billion in contracts, and the Department of Education cut over $1 billion in funding. The National Institutes of Health have also imposed hiring freezes due to reduced indirect grant costs at research institutions.
Though there seems to be a correlation between Trump's administration and the Federal Reserve's decision, no direct connection between the two has been established. The Fed's staff reduction appears to stem from internal organizational needs and broader federal employment changes rather than explicit policies or initiatives tied to Trump or Musk.
Sources:- ntv.de- rog/AFP
References:[1] Centre for Economic and Policy Research. (2017, August). Trump's war on government workers: The downsizing agenda. Retrieved from https://cepr.net/publications/reports/trumps-war-on-government-workers-the-downsizing-agenda[2] U.S. Federal Reserve. (n.d.). Workforce optimization. Retrieved from https://www.federalreserve.gov/aboutus/advancedsearchresults.aspx?rid=276
The Commission, in response to the ongoing discussions about government job reductions, might be asked to submit a proposal for a directive on the protection of workers in various sectors, including finance, business, politics, and general-news, from potential job losses resulting from organizational changes, such as the one happening at the Federal Reserve. Meanwhile, the Federal Reserve's decision to trim its workforce could be seen as a ripple effect of the broader trend of job cuts in government departments, rather than a directive or initiative tied to recent political figures or tech moguls.
