Citi is considering trimming its headcount in several major units by at least 10% as the firm embarks on a corporate overhaul it announced in September, according to CNBC, which cited sources familiar with the matter.
The New York City-based bank’s workforce reduction plan, dubbed internally as “Project Bora Bora,” will eliminate regional managers, co-heads and other employees with overlapping responsibilities at the firm, CNBC reported Monday.
Chiefs of staff and chief administrative officers across the bank will be cut this month, sources told the media outlet. Operations staff who aided divisions that have been divested or reorganized are also at higher risk of layoffs, they said.
The discussions are still in early stages and the number of roles cut could change, sources told CNBC. Citi’s global headcount stands at 240,000, according to information the firm released last month.
The firm has reportedly hired Boston Consulting Group to help it carry out the plan.
“These are not decisions that have been taken lightly,” Citi CEO Jane Fraser wrote in a memo to employees in September, according to Bloomberg. “We’ll be saying goodbye to some very talented and hard-working colleagues who have made important contributions to our firm.”
CFO Mark Mason in June said severance costs were booked for 5,000 job cuts this year across the company. Citi cut 1,600 jobs in the second quarter and another 2,000 in the third.
Employees will know by the end of November any changes to their roles, Fraser said in the memo.
A Herculean task
The cuts come as Citi is undergoing its most significant reorganization in more than a decade. The bank announced in September that it will scrap its two-division structure and replace it with five units whose leaders report directly to Fraser.
The changes are meant to eliminate “unnecessary complexity” across the bank, said Fraser, who, since replacing Mike Corbat in 2021, has been tasked with reining in expenses and boosting the underperforming firm’s stock price.
While much is at stake for Citi amid the reorganization, Fraser had no choice but to make major changes at the firm, said Pierre Buhler, a banking consultant with SSA & Co.
“She had no choice. Citi is not doing well, so she's firing on every cylinder,” he said.
The overhaul, if completed successfully, would cement Fraser as an industry outlier, Buhler said.
“If Jane Fraser can pull off what she's announced, she will be a hero, there is no question. By announcing that, effectively, she would remove five layers of management, that's something that has never been done in banking,” he said.
The task, however, will be formidable, given the complex organizational structure of the more than two-centuries-old bank, Buhler said.
“It's a bunch of systems that have been assembled over the years that are very entrenched, like in many other banks,” he said.
