Citigroup has recently initiated a new wave of job cuts, targeting senior managers as part of a comprehensive reorganization plan unveiled two months ago. The reduction will affect approximately 10% of senior manager positions, equating to around 300 managers. This move comes as the New York-based bank, which currently employs approximately 240,000 individuals, strives to align its organizational structure with a simplified operating model.
The bank’s official statement highlights the significance of the modifications, acknowledging the challenging decisions involved while emphasizing the belief that they are necessary steps for Citigroup. The restructuring aims to address various challenges faced by the banking industry, including a decline in dealmaking activities, an uncertain economic climate, and the Federal Reserve’s impact of increasing interest rates.
CEO Jane Fraser, who assumed leadership amidst a period of underperformance in the bank’s stock price, seeks to rejuvenate Citigroup and eliminate inefficiencies through her restructuring plan. Fraser considers these changes to be the most consequential operational transformation in nearly two decades.
Fraser’s strategy involves dividing the bank into five independent units, each with its own leader reporting directly to her. Consequently, the restructuring will lead to a reduction in personnel, signifying departures of talented and dedicated colleagues. This fundamental shift deviates from previous restructuring attempts, as Fraser seeks to eliminate the middle layer of management that traditionally reported to the CEO.
Additionally, Citigroup intends to withdraw from consumer banking operations in various parts of the world, as previously outlined in a plan announced after Fraser assumed her role in 2021. The bank has already closed nine out of 14 consumer franchises, including those in Australia, Malaysia, India, and Taiwan. Citigroup’s Chief Financial Officer, Mark Mason, will provide further details on the restructuring at an upcoming banking conference in New York.
Despite the challenges faced by Citigroup and the wider banking industry throughout the year, the reorganization efforts implemented by CEO Jane Fraser demonstrate a commitment to revitalizing the bank’s performance and adapting to evolving market dynamics.
Frequently Asked Questions
1. How many senior manager positions will be affected by Citigroup’s job cuts?
Approximately 300 senior manager roles, accounting for 10% of the positions, will be impacted by Citigroup’s job cuts.
2. How many employees does Citigroup currently employ?
Citigroup currently employs around 240,000 individuals.
3. What is the objective of Citigroup’s reorganization plan?
Citigroup’s reorganization plan aims to align the bank’s organizational structure with a simplified operating model and address challenges in the banking industry, including a decline in dealmaking activities, economic uncertainty, and the impact of interest rate fluctuations.
4. What is CEO Jane Fraser’s strategy for restructuring Citigroup?
CEO Jane Fraser plans to divide Citigroup into five separate units, each led by an independent leader reporting directly to her. This approach aims to streamline operations and eliminate the middle layer of management within the bank.
5. Which franchises has Citigroup closed as part of its withdrawal from consumer banking in certain regions?
Citigroup has closed nine out of the 14 consumer franchises as part of its withdrawal from consumer banking in Asia, Europe, the Middle East, Africa, and Mexico. This includes franchises in countries such as Australia, Malaysia, India, and Taiwan.