Citigroup Inc.’s stock was up 2.78% Wednesday after the megabank said it would reorganize into a flatter structure, with the heads of its five major business units reporting directly to Chief Executive Jane Fraser.
did not disclose any head-count reduction figures but said that it is “committed to retaining top talent and supporting employees who are leaving the company.”
A spokesperson for Citi said the bank is only announcing its overall strategy at the current time, with no additional information about financial impact or head count.
In the second quarter, Citigroup disclosed a total head count of 240,00 as of June 30, flat with the previous quarter. Chief Financial Officer Mark Mason said in June that the bank set plans to cut 5,000 jobs in the first half of the year, including in its banking and markets units. In the second quarter, the bank funded severance costs for 1,600 people totaling about $350 million, he said. Those changes have yet to be officially counted in Citi’s total employment number.
Fraser said the changes will eliminate unnecessary complexity and “increase accountability for delivering excellent client service.” The leaders of the five business units are Shahmir Khaliq, services; Andrew Morton, markets; Peter Babej, head of banking on an interim basis; Andy Sieg, wealth; and Gonzalo Luchetti, U.S. personal banking.
Citi said it will simplify its structure by eliminating its personal-banking and wealth-management layer, as well as its institutional-clients group. It will also do away with regional layers in the Asia-Pacific region, Europe, Middle East and Africa, and Latin America as it exits these businesses.
“The scope of Citi’s geographic management will narrow to local-market client coverage and delivery, and legal entity management,” Citi said. “Banking and international will share a common management team, creating greater connectivity across Citi for clients under a leaner structure.”
Word of a potential reorganization at Citigroup started leaking out over the summer, as reports surfaced of a move by Fraser to set up the five major operating units.
As banks move beyond the past 15 years of low rates, cheap capital and lower costs, head-count reductions and reorganizations have become more common, industry analysts have said.
Goldman Sachs Group Inc.
for example, has reintroduced performance reviews and is expected to cut up to 5% of its workforce by eliminating underperforming bankers from its rolls. Barclays, which has a large presence in the U.S., is cutting 450 jobs.
UBS Group AG
is also shedding 35,000 jobs as part of its acquisition of Credit Suisse.
At last check, Citigroup’s stock is down 6.2% so far in 2023, compared with a 16.5% increase in the S&P 500