According to insiders, Citigroup (C.N.) is reorganizing, and compliance and risk management support personnel will likely lose their jobs. One person claimed technology personnel working on overlapping functions could be laid off.
According to individuals who requested anonymity, Citi management is already considering layoffs with employees. One insider stated departure meetings were beginning.
The talks began after the third-largest U.S. bank announced managerial cuts and employment cuts on Wednesday. CEO Jane Fraser, who termed Citi’s biggest restructuring in almost two decades, will acquire greater direct control over its operations to raise profit and share price.
According to one insider, revenue-generating executives conducted calls on Wednesday to explain the changes and reassure their teams that the reform will minimize bureaucracy and prioritize profit-making.
A 2020 consent order from regulators requires the bank to remedy various “longstanding deficiencies” in its internal controls.
On Wednesday, Citi claimed, “simplifying the organization will also advance the execution of Citi’s transformation, the firm’s top priority.”
One source claimed Citigroup had invested considerably in I.T. systems to improve risk management and compliance with the consent order. However, another source said the corporation still has numerous employees with overlapping functions and redundant technology.
“They have been very careful and deliberate in what they do, especially because the risk and control transformation must work,” Citi analyst Peter Nerby of Moody’s said.
Citi’s five key company heads will report directly to the CEO. The bank will reduce non-North American regional leadership.
According to an internal memo seen by Reuters, Citibank Europe CEO Kristine Braden is departing after 25 years as part of the organizational shift.
After Q2, Citi had 240,000 employees. That compares to 216,000 at Bank of America (BAC.N) and 234,000 at Wells Fargo (WFC.N), the second and fourth-largest U.S. lenders.
While the job cuts are unknown, Fraser wrote on Wednesday that they will allow producers and dealmakers to focus on clients and results.
“We’ll lose talented and hardworking colleagues,” she wrote.
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