The Federal Deposit Insurance Corporation (FDIC) has reportedly told staff it plans to cut its workforce by around 20%.
Reuters reported that it saw the email on Monday, which outlined several initiatives the agency plans to use to slim down its workforce. These include early retirement, incentives for resigning and layoffs if necessary.
According to a copy of the email, the goal is to reduce staffing by about 1,250 people. This will include the 500 people who accepted a government-wide buyout offer. Additionally, it will include the 170 workers who were on probation, however, these exits are currently being contested in court.
Employees who examine and help resolve failed banks and those who keep sensitive bank information safe may be exempt from resigning, according to the email.
The FDIC has noted that wider involuntary layoffs will commence sometime after 13 May, though this will be viewed as a last resort.
Mirroring other agencies
The independent agency was created to maintain stability and public confidence in the US financial system. Earlier this week, the FDIC ordered Discover Bank to return roughly $1.2bn to merchants and pay a civil penalty of $150m after it found consumer cards to be misclassified as commercial for nearly 17 years.
It wasn’t long ago that the FDIC was planning to add more staff, however, this was halted in January when US President Donald Trump announced an executive order to prevent any federal agencies from hiring.
What followed was a slimming down of several federal agencies in the payments ecosystem, including the Consumer Financial Protection Bureau (CFPB). Trump initially wanted to cut the CFPB’s workforce by around 90%, though this was blocked by a Judge.
Leading the charge on these cuts is the newly created Department of Government Efficiency (DOGE), which Elon Musk is closely affiliated with.
