Citigroup (C) has commenced a fresh wave of job cuts among senior managers as part of an extensive reorganization plan that was announced two months ago. Approximately 300 managers, equivalent to around 10% of senior manager roles, will be affected by the cuts. The reorganization is aimed at aligning the bank’s organizational structure with a new, simplified operating model.
The move comes at a challenging time for Citigroup and the banking industry as a whole. Throughout 2023, large banks with significant trading and investment banking operations have been grappling with a downturn in dealmaking, an uncertain economic climate, and the impact of higher interest rates set by the Federal Reserve.
Financial service industry bonuses are expected to remain flat or decrease this year, according to a third-quarter report. In particular, pay incentives in investment banking and commercial banking are projected to be flat compared to 2022 and below the levels of the previous three years.
Citigroup’s CEO, Jane Fraser, hopes that the restructuring plan she unveiled in September will rejuvenate the bank’s stock price, which has been trailing behind its rivals. This overhaul is being touted as the most significant change in how Citigroup operates in nearly two decades.
Fraser aims to transition Citigroup from operating with two mega-divisions into five separate units, with leaders reporting directly to her. This structural change is expected to result in a reduction in headcount. While acknowledging that talented colleagues will be departing, Fraser is resolute in her efforts to streamline operations and eliminate excesses that have accumulated over the years.
As part of an earlier plan, Citigroup is also scaling back consumer banking operations in certain regions. The bank has already closed nine out of the 14 consumer franchises it planned to exit in Asia, Europe, the Middle East, Africa, and Mexico. The sale of its consumer operations in Indonesia was recently announced, with Singaporean bank UOB acquiring four Asian franchises.
In contrast to previous restructuring efforts, Fraser is taking a different approach by removing the middle layer of management that previously reported to the CEO. Citigroup’s CFO, Mark Mason, is expected to provide further details on the bank’s restructuring plan at an upcoming banking conference in New York.
Overall, these developments demonstrate Citigroup’s determination to adapt and optimize its operations to navigate the evolving financial landscape.
1. How many senior manager roles will be affected by Citigroup’s latest round of job cuts?
Approximately 300 senior manager roles, constituting roughly 10% of the total, will be impacted by the job cuts.
2. What is the aim of Citigroup’s reorganization plan?
The reorganization plan aims to align Citigroup’s organizational structure with a new, simplified operating model.
3. Why is Citigroup implementing job cuts?
Citigroup is implementing job cuts as part of its reorganization efforts to streamline operations and eliminate excesses.
4. How has Citigroup’s stock price performed under CEO Jane Fraser?
Since Jane Fraser assumed the role of CEO, Citigroup’s stock price has fallen by 31%, which is almost double the decline experienced by other major banks in the same period.
5. What regions did Citigroup plan to exit in terms of consumer banking operations?
Citigroup initially planned to exit 14 consumer franchises across Asia, Europe, the Middle East, Africa, and Mexico. So far, it has closed nine of these franchises, including Australia, Malaysia, India, and Taiwan.