Last month, the U.S. Government Accountability Office (GAO) released a report to the Senate Committee on Banking, Housing, and Urban Affairs and the House Committee on Financial Services titled “Recent Workforce Reductions and Other Personnel Management Changes.” This report was prepared pursuant to a directive in the Dodd-Frank Act which requires the GAO to report triennially on the quality of SEC’s personnel management. The overview of the report notes the following:

Since January 2025, the Securities and Exchange Commission (SEC) has implemented significant personnel management changes in response to executive orders and other direction from the administration. Key changes include offering voluntary departure incentives, requiring employees to work in the office full time, and removing references to diversity, equity, and inclusion from SEC policies and procedures. About 18 percent of employees left SEC during the fiscal year ending September 30, 2025. Most employees who departed took a voluntary departure incentive, and according to SEC, it did not conduct any involuntary terminations in response to executive actions in 2025. SEC also paused its leadership development program in 2025, in part due to uncertainty about the availability and timing of future advancement opportunities.

The report indicates that the SEC has taken some steps to manage the issues that it is facing from the Staff reductions and other changes. The report notes:

SEC has undertaken workforce planning efforts to manage its actions to reduce its workforce. In spring 2025, SEC conducted analysis and began holding human capital review meetings to understand the characteristics of departing staff and to identify skill and resource gaps.

– Analysis of departing staff. Following staff departures due to voluntary buyouts and deferred resignations in April 2025, SEC analyzed the characteristics of staff who left the agency. This analysis found, among other things, that employees with longer tenure were more likely to have taken the voluntary buyouts. Specifically, employees with 20 or more years tenure disproportionately made up the people who voluntarily departed. Officials said this outcome was expected because these employees were more likely to be eligible for early retirement.

– Human capital review meetings. In April 2025, officials from Human Resources and the Office of the Chief Operating Officer began holding modified versions of SEC’s annual human capital reviews with each division and major office on a regular basis. The purpose of these meetings was to gather information about workforce changes and help division heads determine how to reorganize to address these changes. Divisions identified some areas of lost expertise—for example, Investment Management identified lost expertise on rulemaking and on the Investment Company Act of 1940. Officials also assessed whether new priorities from the Chairman could reveal additional workforce gaps. For example, prioritizing cryptocurrency rulemaking might require SEC to address a gap because few employees have both rulemaking and cryptocurrency expertise.

In June 2025, following staff departures and disproportionate losses in specific areas of the workforce, SEC made changes to senior officer ratios and reviewed other supervisory ratios. Specifically, SEC increased the target ratio of employees and supervisory employees to senior officers. They also reviewed divisions’ and offices’ compliance to ensure that supervisory staffing met established targets, according to officials.

In July 2025, the Office of Human Resources began working with each division and
office to create and implement a plan to meet those ratios. Strategies to improve supervisory ratios included using incentives to encourage some supervisors to step down from management positions, combining groups that perform the same function, and shifting employees to new groups with similar job duties. In September 2025, SEC again offered voluntary early retirement and voluntary separation incentive payments to most supervisory-graded employees and allowed certain supervisors to accept a downgrade in their duties to help achieve the planned ratios. According to SEC, 42 people departed the agency in fiscal year 2026 as a result of these efforts.

In December 2025, SEC officials submitted an annual staffing plan in response to the November 2025 OPM and OMB memorandum on ensuring accountability in federal hiring. The memorandum provides guidance on the implementation of Executive Order 14356, which requires agencies to prepare an annual staffing plan in coordination with OPM and OMB and comply with the plan throughout the fiscal year. SEC’s fiscal year 2026 staffing plan identified positions for potential hiring for each division and office. It also identified other personnel actions SEC planned to take based on its workforce planning analysis of skills gaps and needs. For example, the plan included steps to consolidate business groups or work functions to address staffing levels after the voluntary departures and to increase internal and public-facing efficiencies, such as consolidating investor assistance functions nationwide under one office.

– Dave Lynn