Citigroup continues overhaul with CEO Fraser addressing managing directors

Citigroup's CEO, Jane Fraser, engaged in a conference call on Thursday with managing directors, revealing further details of the bank's extensive restructuring, according to two undisclosed sources cited by Reuters.

The call follows the bank's announcement last week of its intention to cut 20,000 jobs over the next two years, aiming to streamline operations and enhance financial performance.

In separate discussions, managers in markets, risk, and investment banking were informed of their layoffs as part of the ongoing reorganisation. Citigroup remains vigilant in addressing the impact on its workforce, with more details on severance payments expected next week.

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While Citigroup has periodically updated on the job cuts, the recent call with managing directors offered insights into the broader plan. Fraser discussed various aspects of the reorganisation, emphasising that the current phase would reduce headcount by 5,000, with an additional 5,000 jobs to be cut from divesting businesses.

Another 10,000 staff reductions are planned in support functions like technology and operations. Fraser's strategy to cut approximately 8 per cent of the staff aligns with her broader goal of enhancing the bank's efficiency and elevating its returns and share price. Investors and employees are keenly observing the timing and specifics of these organisational changes.

The bank's fourth quarter was marked by a $1.8 billion loss due to one-off charges, prompting Citigroup to make decisive restructuring moves. Fraser's leadership has underscored the commitment to address internal deficiencies and enhance the bank's overall performance.

The call with managing directors provided a forum for Fraser to communicate the intricacies of the reorganisation and elaborate on the phased job cuts, addressing concerns among employees and investors. Citigroup's planned layoffs stand out as one of the most significant workforce reductions on Wall Street in recent times.

Citigroup is concurrently navigating a regulatory challenge, dealing with a 2020 consent order that demands corrections to longstanding deficiencies in internal controls.

As part of its commitment to regulatory compliance, the bank appointed Jagdish Rao as the regulatory reporting and remediation head. This move is aligned with Citigroup's proactive measures to strengthen its internal controls and regulatory standing.

(With inputs from Reuters)