Jane Fraser, Citigroup’s CEO, Appoints New Management Team and Signals Potential Job Reductions.
Citigroup has announced a major restructuring, its most significant in nearly two decades, aimed at simplifying its management structure and giving CEO Jane Fraser more control. While this move is seen as an effort to revamp the bank, it is also expected to result in substantial job cuts.
Fraser, who assumed the CEO position in 2021, faces the challenge of revitalizing Citigroup, the third-largest US bank by assets, which has long struggled to keep pace with its peers and has been plagued by operational and regulatory issues.
The restructuring news led to a 1.8% increase in Citigroup’s shares in New York. The Financial Times had previously reported on the bank’s potential organizational changes following the retirement of top executive Paco Ybarra.
During an investor presentation, Fraser referred to this restructuring as the most significant changes she has made to the bank’s management. She acknowledged that these changes might make many employees uncomfortable but remained committed to them.
In a memo to staff, Fraser explained that the reorganization aimed to eliminate unnecessary complexity but also recognized that it would involve bidding farewell to talented colleagues. She expressed her frustration with Citigroup’s underestimation in the banking industry and emphasized the significant opportunities ahead for the bank.
Citigroup’s recent financial results have lagged behind its competitors, partly due to the costs associated with previous layoffs.
As part of the restructuring, Citigroup will shift from two large business units to five divisions, with the heads of these units reporting directly to Fraser. Geographically, the bank will organize around its US and non-US businesses instead of regional leadership.
The bank is also searching for a new head of its corporate, commercial, and investment bank, with Peter Babej leading the unit temporarily. More details on the restructuring, including job cuts, will be released by the end of November, with implementation scheduled for the first quarter of 2024.
