Citigroup Inc. (NYSE:C) is poised to unveil a series of management adjustments and the first wave of layoffs on Monday, according to a report by the Financial Times. This development is part of the significant organizational restructuring outlined by CEO Jane Fraser in September 2023, which is anticipated to result in the elimination of numerous positions.
Sources familiar with the matter indicate that the strategic overhaul, known internally as Project Bora Bora, is in its early stages. As part of a top-down review of Citigroup’s organizational structure, only 1% of the total 240,000 bank positions have been addressed so far.
The management’s plan includes reducing the existing thirteen management layers to eight, with the top two layers already streamlined, resulting in a 15% reduction in functional roles and the elimination of 60 operating committees.
The bank is set to implement changes to its operating model in the fourth quarter of 2023, replacing the current three reportable segments with five new operating segments: Services, Markets, Banking, Wealth, and U.S. Personal Banking. Any remaining activities will be consolidated under a separate “All Other” segment.
Fraser has appointed five business heads who will report directly to her and form the Executive Management team. These leaders have named approximately a hundred individuals who will oversee various lines of business. Citigroup aims to complete the restructuring, including the layoffs, by the end of March 2024.
The anticipated Monday announcement will involve heads of different business units informing their staff about the next layers of leadership. Minor reshuffling within the bank is expected, and employees whose roles are eliminated or changed will have a transition period during which they can apply for other positions within Citigroup. However, those not placed in a new role at the end of the transition period will receive details about their severance packages.
This restructuring, the most significant for the company in decades, is designed to simplify the organization by eliminating excess management layers, with the expectation that this will enhance efficiency and accountability. Citigroup’s shares have experienced a 0.9% decrease in the past six months, contrasting with the industry’s 7.8% growth.
In response to the challenging economic environment, U.S. financial firms, particularly banks, are implementing restructuring measures, including workforce reductions. Ally Financial Inc. (NYSE:ALLY) recently initiated workforce reductions affecting less than 5% of its overall headcount, while Wells Fargo & Company (NYSE:WFC) continues to explore opportunities to enhance efficiency by reducing expenses, including headcount and real estate footprint.
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