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Citigroup outlines layoff process, reassignments as overhaul takes shape
Global Banking and Finance Review
Company
By Lananh Nguyen, Saeed Azhar and Tatiana Bautzer
NEW YORK (Reuters) -Citigroup managers are reviewing staff rosters to determine by November who will stay in place, be reassigned or laid off during its biggest reorganization in decades, according to a global memo to staff on Wednesday seen by Reuters.
“Some roles will change, new roles may be created, and roles that do not fit our new structure will be eliminated,” Sara Wechter, the bank’s chief human resources officer, wrote in the memo. “This next layer of change is scheduled to be announced in November.”
Employees whose jobs are eliminated may be eligible to apply for other positions, and the company will offer severance pay and notice periods where eligible, according to the message. The contents of the memo have not previously been reported.
Asked about the layoffs in a subsequent employee town hall on Thursday, bank leaders said the cuts would focus on job functions and geography but provided no details, according to a source familiar with the situation.
Citigroup also convened a meeting of its managing directors on Wednesday, according to two sources familiar with the matter. Executives addressed the measures outlined in Wechter’s memo, one of people said. Bankers had about 15 minutes advance notice about the meeting, which lasted only 30 minutes, the source said.
Citigroup declined to comment on the memo, town hall and meeting with managing directors.
Last month, Citi CEO Jane Fraser announced sweeping changes to simplify the bank’s structure after divesting from non-core markets and focusing on profitable areas. Fraser’s memo to staff did not announce an expected number of job cuts but said the departures would enable staff who generate revenue and dealmakers to focus their time on clients.
“We’ll be saying goodbye to some very talented and hard-working colleagues,” Fraser wrote at the time.
Citi had 240,000 employees at the end of the second quarter. That compares with headcounts of about 216,000 at Bank of America and 234,000 at Wells Fargo, the second and fourth-largest U.S. lenders respectively.
Fraser has sent a tough message to the workforce. “We don’t have room for bystanders, we don’t have room for people who want to stand on the sidelines,” she said in a TV interview last week.
CONSULTATIONS IN THE UK
The bank is also beginning the consultations required in the UK after earlier warning employees about possible redundancies.
“We are updating colleagues on our next steps to align our structure with our strategy, and consulting with the London Consultation Forum about roles currently under review, some of these roles may change, while others will remain largely the same,” the bank said in a statement Wednesday.
Citi hopes the overhaul will revive its share price, which has lagged peers, and will give the CEO more direct control over its businesses.
Reuters has reported that cuts will focus on support areas with overlapping teams such as compliance and risk management, and spare profit-making units.
Citigroup will report third quarter earnings on Oct. 13. In the second quarter, net income tumbled 36% to $2.92 billion, beating analyst expectations.
(Reporting by Lananh Nguyen, Tatiana Bautzer and Saeed Azhar in New York; additional reporting by Milana and Svea Herbst; Editing by Megan Davies, David Gregorio, Kirsten Donovan and Sonali Paul)
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