WASHINGTON–The Federal Reserve plans to reduce its work force by 10% over the next several years to ensure the institution is “right-sized and able carry out its duties to foster a healthy economy,” according to a new report.

The workforce reduction was announced by Fed Chairman Jerome H. Powell in an internal note to staff members reviewed by The New York Times. Similar to what is occurring at NCUA, which is reportedly targeting a 20% workforce reduction as part of reductions ordered by President Trump, certain employees at the FDIC will be eligible to participate in a voluntary deferred resignation program that is aimed at giving those close to retirement the option of an earlier exit. That offer will apply only to people in its Washington offices.

Cuts Across System

Cuts are expected to be made across the entire Federal Reserve System, including the 12 regional banks. Roughly 2,400 people will be affected, the Times reported. 

“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 stated in the memo.

The Fed had earlier announced a hiring freeze on permanent workers. It has also taken steps to distance itself from diversity issues as well as those related to climate change — initiatives that President Trump has opposed, the Times reported. 

In his memo, Powell said the workforce reductions is similar to that which took place under the Clinton administration. At that time, there were “governmentwide efforts to improve efficiency, as is the case now,” Powell said.

Earlier Push-Back

The Times noted that at a congressional hearing in February Powell pushed back on the idea that the Fed had too many employees. 

“The Federal Reserve is a careful and responsible steward of public resources,” Mr. Powell said in his note on Friday.