Citigroup, one of the largest banks in the world, has announced a new wave of job cuts as part of its ongoing reorganization plan. These cuts will primarily affect senior managers, with approximately 10% of senior manager roles, or around 300 managers, being impacted. This represents around 10% of Citigroup’s total workforce of 240,000 employees.
In a statement, Citigroup acknowledged the difficulty of these decisions but emphasized their belief that these steps are necessary for aligning the bank’s organizational structure with its new operating model. The reorganization plan, announced by CEO Jane Fraser two months ago, aims to improve the bank’s stock price, which has been falling behind its competitors.
The banking industry as a whole has faced challenges this year, including a slowdown in dealmaking, an uncertain economy, and the impact of higher interest rates from the Federal Reserve. According to a third-quarter report from Johnson Associates, pay incentives in the financial service industry are projected to be flat or down for the year.
Fraser’s restructuring plan involves splitting Citigroup into five separate units, with leaders reporting directly to her, in an effort to remove unnecessary layers of management and improve efficiency. Additionally, the bank is scaling back its consumer banking operations in certain regions, as part of an earlier plan announced in 2021.
While Citigroup has made similar restructuring announcements in the past, insiders believe that the difference this time is the elimination of the middle layer of management that previously reported to the CEO. This streamlined approach aims to accelerate decision-making and streamline operations.
Citigroup’s CFO, Mark Mason, is expected to provide more details about the bank’s restructuring plans at an upcoming banking conference in New York. Investors and analysts will be closely watching the stock market impact of Citigroup’s efforts and how they align with the broader financial industry landscape.
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