Citigroup announces new round of job cuts

Citigroup Inc has announced a new round of job cuts in its US investment banking division as part of its ongoing restructuring efforts. According to documents filed with the New York State Department of Labour on April 1, the company plans to terminate 430 employees.

These job reductions are expected to primarily impact employees in the technology, media, and telecom sectors within the banking industry. The bank recently finalized significant measures aimed at streamlining its operational framework and enhancing performance, following an initial announcement made in September 2023.

As part of this restructuring initiative, Citigroup aims to reduce management layers from 13 to 8 and downsize its global workforce by 20,000 within the next two years. To date, 5,000 positions have already been eliminated since September.

In conjunction with its fourth-quarter 2023 results unveiled in January, the firm announced plans to trim 1,500 managerial positions, accounting for 13% of its global leadership. This move is projected to result in annual savings of $1 billion.

By streamlining its leadership structure, Citigroup aims to expedite decision-making, foster greater accountability, and sharpen its client-focused approach. According to the filings, the upcoming layoffs are expected to occur in June.

Additionally, Citigroup continues to advance its strategic initiative to withdraw from the consumer banking sector in 14 markets spanning Asia and the EMEA region. Progress has been made with sales completed in nine markets, including Australia, Bahrain, India, Malaysia, the Philippines, Taiwan, Thailand, Vietnam, and Indonesia.

Furthermore, substantial progress has been achieved in winding down consumer banking operations in South Korea, Russia, and China. The company has also recommenced the sales process in Poland.

Citigroup remains committed to divesting its Mexico business through an IPO by 2025. The planned exits from certain markets will unlock capital, enabling the company to redirect investments towards expanding its wealth management operations in key financial centers such as Singapore, Hong Kong, the UAE, and London.

This strategic shift aims to fuel fee income growth by capitalizing on the burgeoning wealth in these regions. In line with this strategy, Citigroup’s head of global wealth, Andy Sieg, recently unveiled plans to enhance the bank’s wealth management footprint in the Greater Bay Area and other parts of Asia, with Hong Kong serving as a pivotal base.

This expansion initiative underscores Citigroup’s commitment to tapping into the wealth opportunities presented by Asia’s economic growth, leveraging Hong Kong’s status as a prominent financial hub. Despite recent challenges, Citigroup’s stock has demonstrated strong performance, outpacing industry growth over the past six months with a 56.7% increase compared to the industry’s 39.7% growth.

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