Austerity Strikes The Fed: Boston Reserve Bank Slashes 160 Jobs Due To US Treasury Cost-Cutting
As The Fed tapers and shifts its decision-making process away from rules-based, model-backed strategies in favor of "we'll know when to tighten when we see it" qualitative hand-waving, it seems the need to maintain teams of PhDs - to mutually masturbate over the historical back-fitted effectiveness of their models - is lacking. As The Boston Globe reports, The Federal Reserve Bank of Boston will cut nearly 15% of its workforce - around 160 jobs - in the largest layoff in over a decade... “It’s obviously a tough decision for us and the folks who are here,” Lavelle said. “It’s really about cost and efficiency.” Austerity strikes... (as it turns out the job cuts are due to losing a key customer - The US Treasury!)
Last week bank officials informed 160 employees — an entire division — that their jobs would be eliminated because a key customer, the US Treasury Department, was cutting costs.
In an attempt to save taxpayers $117 million over the next decade, the Treasury is consolidating certain banking services that it currently spreads among 10 regional Federal Reserve banks, including Boston. In the coming years, those services will be provided by just four regional banks: Kansas City, St. Louis, Cleveland, and New York, said Thomas Lavelle, a spokesman for the Boston Fed. There are 12 regional banks in the Federal Reserve system.
The last time the Boston Fed shrunk in such a significant way was at the start of this century, when the central bank cut the number of offices that handled paper checks from 54 to one nationwide, Lavelle said.
The cuts are the result of a study completed by the Treasury on how to save money.
“The work done by the Federal Reserve on behalf of the US Treasury is critical to our nation’s economy, and we will work together to ensure a smooth transition,” a Treasury spokesman said.
Lavelle said the Boston Fed will try to find affected employees other positions at the Boston bank or other regional banks. “We’re going to treat our employees as humanely as possible."
Peak Central Banker?
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