Citigroup prepares for job cuts as it revamps top management structure

Citigroup Inc. is preparing for a wave of job cuts as Chief Executive Officer Jane Fraser restructures the Wall Street giant in an effort to reverse a years-long slump in the stock price. 

 

The company will now operate from five main businesses and will no longer have three regional chiefs overseeing its business in about 160 countries around the world, according to a statement Wednesday. At least four of Fraser’s senior deputies got new roles in the shakeup, and the firm is looking for a head of banking, which includes oversight of the investment-banking unit.

 

The moves will result in a number of job cuts, though the company doesn’t yet have firm targets for how many employees will be affected, according to people familiar with the matter, who asked not to be identified discussing personnel information. 

 

“These are not decisions that have been taken lightly,” Fraser said in a memo to staff seen by Bloomberg News. “We’ll be saying goodbye to some very talented and hard-working colleagues who have made important contributions to our firm.”

Shares of the company rose 2% to $42.53 at 10:54 a.m. in New York. The stock is still down roughly 40% since Fraser took over in early 2021, more than double the decline of any major US rival in that period.

 

“I know many of you share my frustration that we are seriously underestimated as a bank,” Fraser said in the memo. “These changes to how we operate will accelerate our work to become the winning bank we all know Citi can be.” At an investor conference Wednesday, the CEO characterized the restructuring as the firm’s biggest in 20 years. 

 

The firm is scrapping its two longtime core operating units, one of which focused on institutional clients while the other housed the firm’s consumer offerings.

 

Citigroup will now focus on five main operating units, including a services unit led by Shahmir Khaliq, a trading division headed by Andy Morton and a US personal-banking division under Gonzalo Luchetti. Peter Babej will lead the firm’s banking division on an interim basis, while Andy Sieg is set to join the firm later this month from Bank of America Corp. to lead Citigroup’s wealth offerings. 

 

All five men will be on Fraser’s executive management team, which will expand to 19 people. That includes Ernesto Torres Cantu as head of international, while Sunil Garg continues to lead North America.

 

Paco Ybarra, who previously oversaw the firm’s institutional-clients group, will remain on Fraser’s executive-management team as a senior adviser ahead of his retirement next year. He will focus on the firm’s generative artificial intelligence efforts. 

 

Anand Selva, who previously oversaw the firm’s overarching personal-banking and wealth-management division, will continue as chief operating officer and will help run the firm’s work with upgrading its risk-management offerings. That’s part of efforts to comply with a pair of consent orders regulators saddled Citigroup with in 2020. 

 

Citigroup said it has already reduced 15% of roles tied to back-office functions as part of its work to right-size the top two layers of the bank’s management. The moves are part of the bank’s goal of reducing its efficiency ratio — a measure of how much it costs to produce a dollar of revenue — below 60% in the medium term.

 

Fraser has been seeking to streamline Citigroup’s sprawling global operations, which employ 240,000 people. For years, the company has been in the midst of exiting more than a dozen consumer-banking businesses around the world. 

 

“We now serve a much more targeted set of clients,” Fraser said in the memo. “That allows us to eliminate needless complexity built for an organization meaningfully different from the bank we are today.”