FDIC Announces Reduction in Workforce and Office Closures; HSFC Chairwoman Expresses Concerns
Last Thursday, the Federal Deposit Insurance Corporation (FDIC) announced plans to downsize its workforce substantially, offering buyouts to roughly 20 percent of its employees over the coming weeks. Officials say the move is intended to streamline the organization via supervisory layers and deal with challenges that come with a rapidly aging workforce.
“Today’s announcement is part of a deliberate strategy to further reduce layers of management, acquire new skillsets and allow the agency to proactively address succession planning prior to any crisis or emergency situation,” said Jelena McWilliams, FDIC chairwoman. “This program will enhance our agility, preparedness, and technological transformation.”
Of the roughly 5,800 employees at the FDIC, 42 percent are within or near retirement age. About 1,200 employees will receive Voluntary Early Retirement Authority (VERA) or Voluntary Separation Incentive Payment (VSIP) notices.
The incentive payments are higher than those that federal employees typically see. By law, most agencies can offer incentives up to $25,000 for Title 5 employees. As a financial regulator, however, the FDIC compensates their workers differently than appropriated agencies.
Those eligible must apply for VERA/VSIP before April 10, and approved employees may leave as early as May 9. The agency hopes to have separating employees exit by the beginning of June.
Congresswoman Maxine Waters (D-Calif.), Chairwoman of the House Financial Services Committee, released a statement after the announcement indicating her disapproval of the FDIC’s reduction plans.
“The FDIC should be working to ensure stability in the financial system, not to destabilize the livelihoods of its employees,” she said.
Faced with the current spread of the coronavirus, she added that “the agency should be embracing the expertise of senior employees who have worked through a global financial crisis, instead of pushing them out the door.”
To read Chairwoman Waters’ full statement, click here.