Citigroup Inc. ( C Quick Quote C - Free Report) has commenced the elimination of various job positions as part of its major organizational overhaul process. Per a Yahoo Finance’s article quoting Bloomberg, the job cuts involve approximately 10% of Citigroup’s senior manager roles aggregating to around 300 managers.
The company’s press release said, “Today we shared with our colleagues the next layer of changes across many of our businesses and functions as we continue to align Citi’s organizational structure with our new, simplified operating model. As we’ve acknowledged, the actions we’re taking to reorganize the firm involve some difficult, consequential decisions, but we believe they are the right steps to align our structure with our strategy and ensure we consistently deliver excellence to our clients”.
Further, Citigroup expects to complete restructuring and subsequent layoffs by the end of first quarter 2024.
Specifically, in September 2023, C announced plans to make significant changes in its organizational model to eliminate unnecessary complexity across the bank and better align with its overall business strategy. The new organizational structure will replace the existing primary two reportable segments with five new reportable operating segments namely Services, Markets, Banking, Wealth and U.S. Personal Banking. The remaining activities will be clubbed under a separate All Other segment.
These new segments will operate across two regions, consisting North America and an international group. Further, to focus on client engagement and experience across the globe, Citigroup has created a new Client organization.
Per the new simplified operating model, the leaders of each of Citigroup’s five main businesses will report directly to the CEO and be members of the Executive Management team. This is expected to drive accountability and make the decision-making process swifter.
This organizational restructuring, the biggest for C in decades, is aimed at simplifying and eliminating extra management layers. Further, management believed that this will enhance efficiency.
Apart from this major organizational realignment, Citigroup has been emphasizing growth in core businesses by shrinking international operations. Notably, the company remains on track to exit the consumer banking business in international markets and focus on growth in wealth management and personal banking space.
In line with this strategy, this week,
it announced the completion of the sale and full migration of its Indonesia consumer businesses to UOB Indonesia. The sale includes retail banking, credit card and unsecured lending businesses, and the transfer of employees.
Citigroup’s shares have lost 1.7% in the past six months against the
industry’s 7.9% growth. Image Source: Zacks Investment Research
C presently carries a Zacks Rank #3 (Hold). You can see
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Throughout 2023, finance firms in the United States are having to navigate their way through the current tough economic environment where deal-making activities and volumes continue to be muted. Hence, to remain profitable amid the high interest rate environment and hovering recession fears, financial institutions are undertaking several restructuring efforts, majorly job cuts.
Last month, in an effort to streamline business operations,
Ally Financial Inc. ( ALLY Quick Quote ALLY - Free Report) started trimming its workforce, a move that is expected to impact less than 5% of ALLY’s overall headcount.
Spokesperson Peter Gilchrist has said in an emailed statement that the workforce reduction will occur across divisions and is not restricted to a single line of business.
In September, at an investor conference,
Wells Fargo & Company’s ( WFC Quick Quote WFC - Free Report) chief financial officer, Mike Santomassimo, noted that the company was eyeing opportunities to cut down expenses by reducing its real estate footprint and headcount.
Santomassimo stated, “We continue to believe we’ve got a lot more to do to make the company as efficient as it should be.”
Since third-quarter 2020, WFC has cut almost 40,000 jobs. Santomassimo added, “We had too much real estate before Covid, and so we’ve been methodically working through that portfolio over the last few years.”