The Federal Deposit Insurance Corp. intends to let go more than 1,200 employees as part of the Trump administration’s plans to slash the federal workforce.
The job cuts are set to come through a combination of voluntary retirements and separations from the agencies, as well as leaving open jobs at the agency unfilled, FDIC leadership said in an email to agency staff Monday.
The total 1,250 in cuts the agency seeks will include 500 people who took the Trump administration’s deferred resignation program offer earlier this year, according to the email.
If not enough FDIC staff agree to leave voluntarily, the agency will conduct a formal reduction in force effort beginning May 13, the email said.
The FDIC has also terminated around 170 probationary employees, although those firings have been tied up in litigation.
The agency had approximately 6,200 employees at the start of the year.
The FDIC insures US bank deposits up to $250,000 and is responsible for safely winding down banks when they fail. The agency also directly supervises thousands of banks around the country, including many community banks.
Not all FDIC units will be subject to job cuts, and eligible staff will have between April 28 and May 5 to accept voluntary dismissals, according to the email sent from the FDIC’s Global Messenger account.
The FDIC “does not expect” to approve all applications for incentives under the Voluntary Early Retirement Authority, the Voluntary Separation Incentive Program, or the DRP, according to email. People working in mission critical units such as those responsible for resolving failed banks, risk management examinations, and information security are unlikely to receive approval for voluntary separations, the email said.
The FDIC declined to comment.
Congress doesn’t provide funding for the FDIC, so any savings from eliminating positions at the agency wouldn’t affect the federal budget. The majority of its funding comes from insurance premiums paid by banks with a much smaller percentage coming from interest on government securities.
The all-hands email comes after Elon Musk’s Department of Government Efficiency descended upon the FDIC on April 10 seeking up to a 20% cut in the agency’s staff.
The coming cuts to the FDIC’s workforce comes after the 2023 collapses of Silicon Valley Bank, Signature Bank, and First Republic Bank exposed a shortage of agency bank examiners.
A February 2023 report from the agency’s inspector general found that 38% of the FDIC’s employees would be eligible for retirement by 2027.
“Absent effective human capital management, the FDIC may lose valuable knowledge and leadership skill sets upon the departure of experienced examiners, managers, and executives,” the report said.
Governmentwide Cuts
Around 75,000 of the 2.4 million-strong federal civilian workforce accepted the offers earlier in the year. Several government agencies, including the Treasury Department, have recently given employees a second chance to apply.
Other agencies, such as the Consumer Financial Protection Bureau and the Department of Health and Human Services, have begun the RIF process as they seek to eliminate huge swaths of their workforces. A federal judge put the CFPB’s reduction in force plans on hold.
