Amidst internal restructuring aimed at streamlining operations and boosting stock performance, Citigroup Inc. is contemplating substantial workforce reductions, which could potentially be one of the most significant layoffs Wall Street has seen in recent years.
CEO Jane Fraser, spearheading the ambitious "Project Bora Bora," has set the financial community abuzz with the prospect of at least 10% cuts in several of the bank's major businesses. The exact scale of the layoffs will be clearer with the bank's financial update slated for January alongside its fourth-quarter earnings.
Fraser's endeavor comes at a critical juncture for Citigroup, as the bank grapples with the legacy of underperformance that has challenged her predecessors since 2007. With a tangible book value ratio that pales in comparison to its peers, Citigroup is in dire need of a turnaround.
The operational restructure, steered by Titi Cole, Citigroup's head of legacy franchises, and supported by the consultancy of Boston Consulting Group, targets the elimination of redundancies and a flattening of managerial hierarchies. The plan, which has maintained Citigroup's headcount at 240,000 while rivals have trimmed their rosters, reflects Fraser's commitment to align the bank's structure with its strategic objectives.
Despite the strategic rationale behind the planned cutbacks, the looming layoffs have stirred a climate of uncertainty and anxiety among the staff. Citigroup, seeking to navigate through the challenges, has remained tight-lipped about the exact numbers, though insiders predict executive roles could face more than a 10% reduction.
The bank's statement reiterates its focus on unlocking the full potential of the firm and fulfilling commitments to stakeholders. It acknowledges the tough decisions ahead but maintains that these are necessary steps in its broader strategic realignment.
Fraser, who took the helm at Citigroup in 2021, has been contending with the dual pressures of bolstering profits and addressing regulatory concerns. Despite her efforts, Citigroup's stock performance continues to trail behind that of its competitors, underscoring the urgency of her restructuring plan.
As the banking sector braces for Citigroup's next move, investors and employees alike are watching closely, anticipating a transformation that could set a new course for this financial institution.
