In the wake of Citigroup’s ambitious reorganization efforts, sources well-versed in the matter indicate that support personnel specializing in compliance and risk management are most susceptible to workforce reductions. Additionally, technology personnel handling overlapping functions find themselves at risk of job cuts, according to insiders.
Sources have revealed that Citigroup managers have already commenced confidential dialogues with employees regarding potential layoffs, emphasizing the confidentiality of such personnel matters. Individual discussions concerning departures have also commenced, according to one of the sources.
Citigroup has refrained from commenting on the matter.
These conversations come on the heels of the third-largest U.S. bank’s announcement to streamline its management hierarchy and reduce its workforce. CEO Jane Fraser, characterizing this reorganization as Citigroup’s most significant in nearly two decades, will assume greater direct oversight of the bank’s operations in a bid to enhance profitability and bolster the stock price.
Top executives responsible for revenue-generating divisions convened discussions on the changes and sought to reassure their teams that the reorganization would streamline operations, reducing bureaucracy while prioritizing profit-generating activities, as per an insider.
It is noteworthy that Citigroup continues to grapple with a 2020 consent order issued by regulatory authorities, requiring the rectification of “longstanding deficiencies” in its internal controls.
In a statement issued on Wednesday, the company underscored that “Simplifying the organization will also advance the execution of Citi’s transformation, the firm’s top priority.”
Although Citigroup has made substantial investments in recent years to fortify technology systems, enhance risk controls, and bolster compliance measures in response to the consent order, sources suggest that redundancies persist in personnel and technology infrastructure.
Moody’s senior vice president Peter Nerby, responsible for rating Citigroup, commented, “They have been very careful and deliberate in what they do, especially because the risk and control transformation must work.”
Under the revised organizational structure, the heads of Citigroup’s five major business segments will report directly to the CEO. Furthermore, the bank plans to eliminate regional leadership positions outside of North America.
At the close of the second quarter, Citigroup’s workforce numbered 240,000 employees, surpassing the headcounts of Bank of America and Wells Fargo, the second and fourth largest U.S. lenders, respectively.
While the precise magnitude of the forthcoming job reductions remains uncertain, CEO Jane Fraser acknowledged in a memo to staff on Wednesday that these departures would allow revenue generators and dealmakers to devote more time to client interactions and achieving results. She lamented that “We’ll be saying goodbye to some very talented and hard-working colleagues.”
Please note that this report has been derived from a wire agency feed, with no modifications made to the content apart from the headline change.
By Reuters
