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Citigroup (C) to Cut 10% Jobs in Its Wealth Segment in London
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Citigroup Inc. (C - Free Report) is planning to reduce approximately 51 job roles across its Wealth segment in London. The move would affect 10% of its Wealth segment workforce, comprising 485 employees. The news was reported by CNBC.
Per an internal memo seen by Bloomberg, the majority of the job roles being eliminated would range from the post of assistant vice president to the director level. The elimination is likely to involve 21 job roles in C’s Private Bank division.
The decision to eliminate job positions in the Wealth segment comes as the company aims to boost the unit’s returns after the discouraging results witnessed in the last reported quarter. In the fourth quarter of 2023, the segment’s efficiency ratio rose to 99% from 92% recorded in the year-ago quarter.
A chief operating officer of Citigroup stated, “The wealth business is continuing to identify areas to improve efficiency through structural changes and cost base reductions.”
Apart from cutting jobs to improve performance, Citigroup is focusing on its core business strengths. Hence, the company is exiting consumer banking business in international markets and focusing on growth in wealth management and commercial banking space. The bank completed the divestiture of nine out of its 14 international consumer franchises by the end of 2023. Further, it has wound down almost 70% of its total retail loans and deposits in Russia, Korea and China.
In October 2023, Citigroup agreed to sell its China-based onshore consumer wealth portfolio to HSBC Holdings plc (HSBC - Free Report) . The completion of this deal is expected in the first half of 2024. As a result of the sale, C will transfer assets under management and deposits worth approximately $3.6 billion to HSBC.
Citigroup has restarted its sales process in Poland and remains on track to execute an IPO for its Mexico business in 2025. These initiatives will likely drive top-line growth in the upcoming period.
Alongside such divestitures, C is focusing on organizational realignment to simplify its governance structure by eliminating various management layers. According to this, the company made changes to its operating model in the fourth quarter of 2023. Management expects to complete the simplification in first-quarter 2024. This will likely result in the elimination of approximately 5,000 managerial roles, leading to around $1 billion of run-rate savings.
Over the medium term, both of Citigroup’s transformational strategies, including business exits and organizational, are expected to reduce its headcount by 20,000 job roles, excluding its workforce in Mexico. This is expected to result in total savings of about $2-$2.5 billion.
Citigroup’s shares have risen 29% in the past three months compared with the industry’s 20.1% growth.
Last month, Reuters reported that BlackRock, Inc. (BLK - Free Report) was planning to eliminate 600 job positions. This accounted for nearly 3% of the company’s total global workforce.
Despite this elimination, BLK remained positive about its growth prospects. By the end of 2024, the company expects to employ more workforce, as it plans to expand certain parts of its business.
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Citigroup (C) to Cut 10% Jobs in Its Wealth Segment in London
Citigroup Inc. (C - Free Report) is planning to reduce approximately 51 job roles across its Wealth segment in London. The move would affect 10% of its Wealth segment workforce, comprising 485 employees. The news was reported by CNBC.
Per an internal memo seen by Bloomberg, the majority of the job roles being eliminated would range from the post of assistant vice president to the director level. The elimination is likely to involve 21 job roles in C’s Private Bank division.
The decision to eliminate job positions in the Wealth segment comes as the company aims to boost the unit’s returns after the discouraging results witnessed in the last reported quarter. In the fourth quarter of 2023, the segment’s efficiency ratio rose to 99% from 92% recorded in the year-ago quarter.
A chief operating officer of Citigroup stated, “The wealth business is continuing to identify areas to improve efficiency through structural changes and cost base reductions.”
Apart from cutting jobs to improve performance, Citigroup is focusing on its core business strengths. Hence, the company is exiting consumer banking business in international markets and focusing on growth in wealth management and commercial banking space. The bank completed the divestiture of nine out of its 14 international consumer franchises by the end of 2023. Further, it has wound down almost 70% of its total retail loans and deposits in Russia, Korea and China.
In October 2023, Citigroup agreed to sell its China-based onshore consumer wealth portfolio to HSBC Holdings plc (HSBC - Free Report) . The completion of this deal is expected in the first half of 2024. As a result of the sale, C will transfer assets under management and deposits worth approximately $3.6 billion to HSBC.
Citigroup has restarted its sales process in Poland and remains on track to execute an IPO for its Mexico business in 2025. These initiatives will likely drive top-line growth in the upcoming period.
Alongside such divestitures, C is focusing on organizational realignment to simplify its governance structure by eliminating various management layers. According to this, the company made changes to its operating model in the fourth quarter of 2023. Management expects to complete the simplification in first-quarter 2024. This will likely result in the elimination of approximately 5,000 managerial roles, leading to around $1 billion of run-rate savings.
Over the medium term, both of Citigroup’s transformational strategies, including business exits and organizational, are expected to reduce its headcount by 20,000 job roles, excluding its workforce in Mexico. This is expected to result in total savings of about $2-$2.5 billion.
Citigroup’s shares have risen 29% in the past three months compared with the industry’s 20.1% growth.
Image Source: Zacks Investment Research
C presently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Another Company Undertaking Similar Move
Last month, Reuters reported that BlackRock, Inc. (BLK - Free Report) was planning to eliminate 600 job positions. This accounted for nearly 3% of the company’s total global workforce.
Despite this elimination, BLK remained positive about its growth prospects. By the end of 2024, the company expects to employ more workforce, as it plans to expand certain parts of its business.