Citigroup, one of the largest financial institutions in the United States, has announced a significant corporate overhaul that includes cutting 10% of its workforce. The decision comes as part of CEO Jane Fraser’s efforts to improve the bank’s performance and stock price.
The New York-based bank revealed that approximately 20,000 employees will be let go over the ‘medium term.’ While the exact duration of this period is not specified, it typically denotes a three- to five-year timeframe. Citigroup had around 200,000 workers at the end of 2023, excluding its Mexican operations.
CEO Jane Fraser initiated a comprehensive restructuring of the bank in September, aiming to address its lagging performance compared to its peers since the 2008 financial crisis. The restructuring, internally known as ‘Project Bora Bora,’ involved discussions of 10% job cuts in several major business areas.
Following the initial wave of layoffs targeting the bank’s top layers, Citigroup is preparing for another round of job cuts scheduled for January 22. This move aligns with the broader trend in the American banking sector, where institutions like Wells Fargo and Goldman Sachs have been reducing their workforce to control costs amid stagnant revenue.
Citigroup reported a $780 million charge in the fourth quarter related to the restructuring project, with the potential for an additional $1 billion in severance and other expenses in 2024. The bank anticipates that these measures could ultimately reduce costs by up to $2.5 billion over time.
Additionally, Citigroup mentioned the possibility of slightly fewer job cuts if it opts to utilize internal resources rather than outsourcing certain functions.
The decision to downsize the workforce reflects Citigroup’s strategic response to the evolving financial landscape and its commitment to enhancing operational efficiency. As the bank continues to navigate industry challenges, the impact of these changes on its overall performance and market position will be closely monitored.
