In a move to simplify its organizational structure, Citigroup is set to eliminate over 300 senior manager roles, constituting approximately 10% of staff two levels below Chief Executive Jane Fraser’s executive management team. The cuts were officially announced on November 20, marking a pivotal step in Fraser’s broader plan to streamline the Wall Street giant.
The restructuring, one of the most significant for Citigroup in two decades, is part of Fraser’s vision to eliminate layers of management and dismantle co-head structures, aiming to accelerate decision-making processes across the bank. The plan, initiated in November, is expected to continue globally into 2024, with no specific number given for the ultimate scope of employee dismissals.
Citigroup has not shied away from acknowledging the challenging nature of these decisions. In a statement, the company expressed, “As we’ve acknowledged, the actions we’re taking to reorganize the firm involve some difficult, consequential decisions, but we believe they are the right steps to align our structure with our strategy and ensure we consistently deliver excellence to our clients.”
CEO Jane Fraser emphasized the commitment required from each employee to build a winning bank. In a memo to staff, she acknowledged the sacrifices, saying, “I’m fully aware we’re asking a lot of our people.” The restructuring is part of Citigroup’s broader strategy, which involves abandoning the firm’s two core operating units and concentrating on five key businesses: trading, banking, services, wealth management, and United States consumer offerings.
The bank’s proactive approach to the restructuring plan is evident in the announcement that the next layers of change will be disclosed early in 2024, with the final changes scheduled for completion by the end of the first quarter. Despite these organizational shifts, Citigroup has maintained a flat firmwide headcount of 240,000 employees over the past four quarters.
Even before the formal restructuring plan was initiated, Citigroup had incurred approximately US$650 million in severance charges in the first nine months of 2023, reflecting the elimination of 7,000 positions. The bank’s resilience is further highlighted by its addition of technology staff and other roles to address consent orders received from regulators.
As Citigroup navigates these transformative changes, the financial landscape awaits the outcomes of this strategic overhaul, with industry observers keenly watching how the bank’s new operating model will impact its position in the global market.
(Source: WSJ | Bloomberg | New York Post)
