Citigroup Unveils Ambitious Overhaul Plan, Slashing 10% of Workforce

In a strategic move aimed at revitalizing its financial standing, Citigroup has announced a significant workforce reduction, targeting 10% of its employees in a comprehensive corporate overhaul. The New York-based banking giant disclosed on Friday that approximately 20,000 employees will be laid off over the "medium term," a term typically denoting a three- to five-year period, according to the presentation accompanying the fourth-quarter earnings report.

As of the end of 2023, Citigroup employed around 200,000 workers, excluding Mexican operations undergoing a spin-out process. Citigroup's CEO, Jane Fraser, initiated the restructuring plan in September, seeking to address long-standing challenges that have left the bank lagging behind its peers since the 2008 financial crisis. The bank is currently the lowest-valued among the six largest U.S. banks.

The ongoing initiative, internally referred to as "Project Bora Bora," has already seen multiple waves of layoffs, starting with top-tier executives. Another round of job cuts is scheduled for January 22, according to an insider. American banks, including Wells Fargo and Goldman Sachs, have been trimming their workforces throughout the past year to mitigate costs amid stagnant revenue. Citigroup, until now, had maintained staffing levels at around 240,000 for the entirety of 2023.

Citigroup disclosed a $780 million charge in the fourth quarter related to Fraser's restructuring project. The bank anticipates additional expenses of up to $1 billion in severance and other costs in 2024, with the overall moves aimed at reducing up to $2.5 billion in costs over time.

A footnote in Citigroup's presentation suggested that the actual number of job cuts could be "slightly lower" if the bank chooses to utilize internal resources instead of outsourcing functions. Nevertheless, with the prospect of thousands more job cuts in the coming years, some Citigroup employees are reportedly taking vacation time or mental health leave to explore alternative employment opportunities. The evolving situation has led to a notable exodus, with senior VPs reportedly on vacation with no plans of returning.

Thursday, 23 May 2024