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Citigroup Announces Major Restructuring to Enhance Efficiency

Citigroup’s CEO, Jane Fraser, unveiled significant changes on Wednesday aimed at streamlining the company’s operating model and accelerating decision-making processes. This restructuring reflects Citigroup’s commitment to adapting to a rapidly evolving financial landscape and enhancing its competitiveness.

The key highlights of Citigroup’s restructuring plan are as follows:

Five Interconnected Businesses

Citigroup will reorganize itself into five interconnected businesses, with the leaders of each business unit becoming part of the company’s executive management team, which will consist of 19 individuals. These leaders will report directly to CEO Jane Fraser. This restructuring effectively eliminates the layers of management associated with Personal Banking & Wealth Management and the Institutional Clients Group, as well as the existing regional layers in Asia Pacific, Europe, Middle East and Africa, and Latin America.

Accelerating Decision-Making

One of the primary objectives of this reorganization is to expedite decision-making within the company. By reducing management layers and empowering business leaders, Citigroup aims to enhance accountability and sharpen its focus on clients. This streamlined approach is expected to make decision-making more agile and responsive to the dynamic financial industry landscape.

Strengthening Strategy and Execution

Citigroup believes that elevating the leaders of its five core businesses will grant them a greater influence on the company’s strategy and execution. This move is intended to enhance transparency for investors, providing them with deeper insights into Citigroup’s core operations. By fostering a more direct connection between business leaders and strategic decisions, Citigroup aims to position itself for sustainable growth and success.

Job Cuts Expected

While Citigroup did not explicitly state that there would be layoffs, it is widely reported that these changes will result in a number of job cuts. The restructuring aims to eliminate unnecessary complexity within the organization. Citigroup, however, expressed its commitment to retaining top talent and providing support to employees who may be leaving the company.

Jane Fraser, Citigroup’s first female CEO, initiated this restructuring as part of her broader strategy to increase the bank’s profitability and prepare it for the digital age’s rapid advancements and complexities. In recent years, Citigroup has already exited consumer banking operations in multiple international markets.

Despite these efforts, Citigroup’s stock performance has faced challenges, with shares declining by 40% since Fraser assumed her role over three years ago. The company believes that this restructuring is the “next logical step” to implement its 2022 Investor Day plan and achieve its medium-term targets.

Citigroup’s latest move underscores the evolving nature of the financial industry and the need for traditional banks to adapt swiftly to remain competitive and resilient in an era characterized by digital transformation and shifting customer expectations.

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