Citigroup has initiated a fresh round of job cuts, targeting senior managers, as part of its ongoing reorganization plan. The bank aims to reduce approximately 10% of senior manager positions, which amounts to around 300 managers. Currently, Citigroup employs approximately 240,000 individuals. In an official statement, the bank stated that these changes reflect its efforts to align its organizational structure with its new operating model. Despite acknowledging the difficulty and significance of these decisions, Citigroup believes they are necessary.
The job cuts at Citigroup come amidst a challenging year for Wall Street and the banking industry as a whole. Banks with significant trading and investment banking operations have struggled to overcome a decline in dealmaking, economic uncertainty, and the impact of higher interest rates imposed by the Federal Reserve. Consequently, bonuses in the financial services industry are expected to remain flat or decrease for the year. Pay incentives in investment banking and commercial banking are projected to be flat compared to 2022 and below levels from the previous three years.
Citigroup’s CEO, Jane Fraser, introduced a restructuring plan in September with the goal of revitalizing the bank’s stock price, which has lagged behind its competitors. Fraser considers this restructuring to be the most significant change in Citigroup’s operations in nearly two decades. Instead of operating with two major divisions, the bank will now be split into five separate units, each with leaders reporting directly to Fraser. This structural shift will result in a reduction in the number of employees.
Fraser also plans to scale back consumer banking operations in other regions, as previously announced in 2021. The initial plan aimed to exit 14 consumer franchises in Asia, Europe, the Middle East, Africa, and Mexico. So far, Citigroup has closed nine of these franchises, including those in Australia, Malaysia, India, and Taiwan. Recently, the bank announced the sale of its consumer operations in Indonesia. Singaporean bank UOB, which acquired four of Citigroup’s Asian franchises, stated that these acquisitions have added 5,000 employees to its workforce.
While Citigroup has previously announced restructuring plans, insiders note that the key difference this time is the removal of the middle layer of management that previously reported to the CEO. Mark Mason, Citigroup’s CFO, is expected to provide further details about the bank’s restructuring at a banking conference in New York next month.
