Bank still employs people with overlapping functions, say sources
NEW YORK:
As Citigroup embarks on a sweeping reorganisation, support staff in compliance and risk management are among the most likely to lose their jobs, say sources close to the situation.
Technology staff working on overlapping functions are also at risk of being laid off, one of the people said.
Citi managers are already convening discussions with employees about potential layoffs, according to the sources, who declined to be identified discussing personnel matters. One-on-one meetings about departures were also starting, one of the sources said.
Citigroup declined to comment.
The conversations come after the third-largest US bank announced on Wednesday that it will strip out a layer of management and cut jobs. CEO Jane Fraser, who called the reorganisation Citi’s biggest in almost two decades, will gain more direct control over its businesses in an effort to boost profit and the share price.
Executives overseeing revenue-producing businesses held calls on Wednesday to explain the changes and reassure their teams that the overhaul would reduce bureaucracy and prioritise profit-making activities, one source said.
The bank is still dealing with a 2020 consent order by regulators demanding it fix several “longstanding deficiencies” in its internal controls.
“Simplifying the organisation will also advance the execution of Citi’s transformation, the firm’s top priority,” the company said on Wednesday.
Citigroup has invested heavily in technology systems in recent years to increase risk controls and compliance to address the consent order, one of the sources said. But the company still employs many people with overlapping functions and redundant technology systems, another of the sources said.
“They have been very careful and deliberate in what they do, especially because the risk and control transformation must work,” said Moody’s Senior Vice President Peter Nerby, the analyst responsible for rating Citi.
Under the new structure, the heads of Citi’s five major businesses will report directly to the CEO. The bank will also cut regional leadership roles outside North America.
