The Federal Deposit Insurance Corp. is looking to reduce its workforce by 1,250, according to an internal memo sent to staff Monday.
The reduction, which would downsize the agency by 20%, is part of the FDIC’s Workforce Optimization Initiative, according to the memo – meant to streamline the agency’s organizational structure while fulfilling its mandates to insure customer deposits, examine banks and resolve failed institutions.
The 1,250 figure includes approximately 500 people who already agreed to the previously announced Deferred Resignation Program. It also includes “the discontinuation of some non-permanent positions,” according to the memo.
Other reductions will come from two other initiatives – the Voluntary Early Retirement Authority and the Voluntary Separation Incentive Program – offered to individuals whose positions have been targeted for reduction.
VERA and VSIP incentives will not be available for “mission critical” positions, which include those whose work revolves around resolving failed banks, risk management examinations and information security. Though “mission critical” employees can apply for DRP, it’s unlikely their applications will be accepted, according to the memo.
This week, FDIC employees will receive an email offering them reduction options their positions qualify for. Employees can apply between April 28 and May 5, and on May 13 they will be notified of the status of their application.
Leadership will decide thereafter if further reductions are needed.
Monday’s memo aligns with previous reports that the FDIC began working with the Department of Government Efficiency on April 10 to identify positions that could be cut. According to President Donald Trump, the DOGE was created to bring transparency to federal spending, “ensuring taxpayer dollars are spent wisely and effectively.”
The FDIC, however, isn’t funded by taxpayers. The regulator is funded primarily by premiums paid by member banks and savings associations, and additionally by the interest earned on investments in Treasury notes.
Other DOGE cuts include those at the Consumer Financial Protection Bureau, although those cuts – 1,500 of them, representing about 90% of staff – were halted by a judge Friday.
The FDIC’s cuts don’t align, however, with a recent FDIC Office of the Inspector General report that attrition at the agency could jeopardize its ability to examine lenders and resolve bank failures.
“With fewer examiners but the same responsibility to conduct statutorily required exams in 2025, it may be difficult for the FDIC to complete these examinations by the end of the year,” the report said. “As a result, the FDIC may need to adjust its current examination processes based on the outflow of skills.”
