Citigroup informed its employees Monday of an upcoming round of job cuts and managerial changes — the next big step in CEO Jane Fraser's
Citi did not say how many positions are being eliminated, or provide the total number of jobs it plans to cut between now and the end of March, when the company expects to complete its reorganization. The company declined to comment on a
In an internal memo on Monday, Fraser said Citi is "moving at pace" to implement the changes so that employees are clear about their roles and can begin to "feel the benefits" of the reorganization. Those benefits, she wrote, include creating greater accountability and making it easier to get things accomplished, which she predicted will "improve competitiveness and drive better results."
"No question, these are the proverbial hard yards," Fraser wrote. "We always knew that changing the trajectory of our bank would not be easy, but I remain confident as ever about the path we're on and the value that our hard work will create for Citi and each of our stakeholders."
Employees whose roles have been eliminated and have not been reassigned to another role at the same level of management will have a chance to apply for other positions at Citi, the Financial Times
In September, when Fraser
The first major step in that reorganization initiative was the announcement that the leaders of five core businesses — markets, business banking, wealth management, U.S. personal banking and treasury, trade and securities services — would join Citi's executive management team and report to Fraser. That move eliminated Citi's two main operating divisions and the management layer directly below Fraser, and it gave her more control over the five core businesses.
In her memo Monday, Fraser wrote that the company is "eliminating regional layers and aligning functional teams directly to our five core businesses."
Fraser, who has been CEO of the $2.4 trillion-asset company since March 2021, is facing pressure to improve Citi's efficiency and deliver better shareholder returns, which for years have lagged those of similarly sized banks.
During the third quarter of this year, Citi's efficiency ratio was 67%, and its return on tangible common equity ratio was 7.7%.The company is aiming for an efficiency ratio of less than 60% and a return on tangible common equity ratio of 11% to 12%.
While Citi has said that additional managerial changes will "cascade" down the company, it has not disclosed how much money it expects to spend on severance packages or how much money it expects to save annually by reducing jobs. Executives have said they plan to provide such details during Citi's fourth-quarter earnings call in January.
Piper Sandler analyst Scott Siefers said Monday that the latest round of changes should help Citi bring down its expenses in the back half of next year.
"We will likely need to continue to wait until January … for the company to put more numerical context around the impact," Siefers wrote Monday in a research note. "However, we believe Citi remains committed to 'bending the curve' on costs in late 2024 and this realignment will certainly help along that path."
Citi expects to spend about $54 billion on noninterest expenses this year, company executives reaffirmed last month.
As of Dec. 31, 2022, Citi employed 240,000 people, according to a regulatory filing. During the first nine months of this year, it reduced its headcount by 7,000 and incurred $600 million of severance charges, Chief Financial Officer Mark Mason said on Citi's third-quarter earnings call.
Citi's management overhaul coincides with its
On Sunday, Citi said that it has completed the sale of its Indonesia consumer businesses to UOB Indonesia. That deal, which was announced in January 2022, was part of a broader sale agreement that included Citi's consumer banking in Malaysia, Thailand and Vietnam.
Sales of the Malaysia and Thailand units were finalized last year, while the divestment of the Vietnam unit wrapped up in March.
To date, Citi has exited nine of the 14 overseas markets. It is winding down operations in China, South Korea and Russia; restarting the sales process in Poland; and planning to pursue an initial public officer of its retail, small business and middle market banking operations in Mexico.
