Citigroup CEO Restructures, Employees Brace for Impact

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Citigroup, a behemoth in the global banking landscape, is once again in the spotlight, but this time, for reasons that are causing ripples of concern among its massive workforce of over 240,000 employees. The banking giant, which boasts a sprawling presence across more than 160 countries and holds over $2 trillion in assets, has weathered several storms since the Great Financial Crisis. However, recent decisions by its CEO, Jane Fraser, signal a potential shift in the company’s operational strategy, sparking unease among its employees and stakeholders.

In a surprising move, Fraser announced a significant round of layoffs in 2023, reversing the hiring spree the bank embarked on in 2021 to bolster its M&A, equity, bond business, and wealth management services. This decision comes on the heels of the Federal Reserve’s decision to raise interest rates by 5.25% since March 2022, leading to a dip in demand. The bank’s stringent stance on remote work, demanding a minimum of three days in-office per week, has added fuel to the fire. This drastic change in course raises questions about the bank’s future trajectory and the impact on its profitability and stock price.

Citigroup’s Big Moves: Major Layoffs and Changes in Remote Work Policies

Citigroup, one of the world’s largest banks boasting millions of customers, thousands of offices in over 160 countries, and assets exceeding $2 trillion, has been making headlines recently. After enjoying success post the Great Financial Crisis and witnessing increased loan demand and declining defaults amidst the Covid-era, the banking giant has also encountered several controversies including compliance issues with anti-money laundering laws.

Major Staff Reduction in Citigroup

The workforce of Citigroup exceeds 240,000, including numerous skilled banking and technology professionals. The bank had embarked on a hiring spree in 2021, capitalizing on the demand surge caused by zero interest rate policies. However, the situation has taken a turn in 2023.

CEO Jane Fraser, who took over in March 2021, has announced layoffs due to the declining demand triggered by the Federal Reserve’s interest rate hike by 5.25% since March 2022. CFO Mark Mason revealed that 5,000 employees were let go in the first half of 2023. This move aligns Citigroup with competitors like Goldman Sachs and Morgan Stanley, who also reduced their workforce to bolster profits.

New Policies on Remote Work

Citigroup has also implemented stringent policies on remote work. Employees failing to comply with the requirement of spending three days per week in the office could face consequences affecting their compensation.

On September 13, Fraser signaled further changes by initiating a restructuring of the bank’s business, resulting in more job losses. This includes the removal of regional business leaders overseas and elimination of overlapping roles in compliance and information technology. The objective is to achieve a leaner, more profitable business.

The Impact of Restructuring

Citigroup reported a 64% surge in revenue to $38.2 billion in Q2. However, the profit witnessed a significant fall, dropping 42% to $1.33 per share. The restructuring plan is already in motion, with European regional head Kristine Braden, appointed in 2020, on her way out. The total number of job cuts remains undisclosed, but considering Fraser’s statement, this could be the company’s most significant restructuring in 20 years.

Other banking giants like JP Morgan and Goldman Sachs are also reconsidering remote work and previous headcount decisions. Goldman Sachs’ approach is the most stringent, mandating most employees to return to the office full time.

What Lies Ahead?

The impact of these changes on Citigroup’s profitability or stock price is uncertain. Since Fraser’s takeover as CEO, Citigroup’s share price has fallen by about one-third (since February 2021), and Q2 2023 earnings per share were 63% below Q1 2021.


Citigroup’s bold moves reflect its commitment to adapt to changing market conditions. The layoffs and restructuring signify the bank’s attempt to streamline operations and boost profitability. These decisions, while perhaps unpopular, could set a precedent for other global banking giants grappling with similar issues. However, the success of these strategies will ultimately be gauged by their impact on Citigroup’s bottom line and stock price in the coming quarters.

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