The Federal Deposit Insurance Corp. plans to eliminate roughly 1,250 positions across most departments, according to an internal email sent to staff around noon Monday and obtained by American Banker.
The cuts come as part of the second phase of the regulatory agency’s plan to reduce staff, which was submitted in April to the Office of Personnel Management and the Office of Management and Budget. The plan aligns with the Trump administration’s broader workforce streamlining effort, known as the Workforce Optimization Initiative that the new Department of Government Efficiency is leading.
“The FDIC plans to reduce staffing by approximately 1,250 positions across most divisions and offices,” the email told employees. “Some of these abolished positions include those eliminated through OPM’s deferred resignation program that closed in February and the discontinuation of some non-permanent positions. Of the remaining positions, some are currently vacant but many are occupied by staff and managers.”
To reduce its workforce, the FDIC said it will pursue two main strategies: offering targeted voluntary separation incentives to staff and, if needed, initiating formal reduction in force procedures to eliminate positions that remain occupied after other attrition efforts.
The agency plans to offer three types of incentives: Voluntary Early Retirement Authority, or VERA; the Voluntary Separation Incentive Program, or VSIP; and the Deferred Resignation Program, or DRP. VERA and VSIP will be made available to employees in roles specifically targeted for reduction, while DRP will be offered more broadly to all staff across the agency.
However, the FDIC cautioned that not every employee who applies will be approved for a buyout.
“We generally do not expect to approve DRP applications for employees who work in resolving failed banks, risk management examinations, FDIC information security or certain other mission-critical positions,” the email informed staff. The FDIC also wrote that, where necessary, the agency will impose a “cap” on the number of separation incentives to “ensure we can accomplish our mission going forward.”
The application window for the separation incentive programs will run from April 28 through May 5. According to a timeline included in the staff communication, the FDIC plans to notify employees of final approvals or denials by May 13.
On Monday, the agency also told staff that the goal of its Workforce Optimization Initiative is to streamline its organizational structure while preserving its core congressional mandates: insuring customer deposits, examining banks and resolving failed institutions.
“To achieve our new structure, we focused on a number of principles, including identifying sections and offices within the organization that can fulfill their missions with a smaller staffing footprint, increasing supervisory spans of control and reducing the number of managers, and reducing duplicative, administrative and support staff across the agency,” the email told staff. “FDIC leadership is committed to supporting all employees throughout the implementation of this initiative.”
A few weeks prior to the announcement of formal staffing cuts, a small team from DOGE
The National Treasury Employees Union — which represents employees from 37 departments and offices, including FDIC staff — has criticized DOGE’s efforts. The American Federation of Government Employees also
The FDIC did not immediately respond to requests for comment.