Citigroup, one of the largest US banks, has warned its UK staff of possible redundancies as it moves ahead with a major overhaul of its business structure. The bank said it expects to reduce some roles and change others as part of its plan to streamline its operations and improve its profitability.
Citi’s reorganisation plan
The bank’s reorganisation plan, announced earlier this month by its CEO Jane Fraser, involves removing a layer of management and cutting jobs across its five divisions: consumer banking, institutional clients group, global wealth, functions and infrastructure. The divisions will report directly to Fraser, who took over as the first female CEO of a major US bank in February.
Fraser said the changes were the biggest reorganisation in almost two decades and aimed to create a “simpler, flatter and more agile” organisation that would be more responsive to customers and shareholders. She said the bank would also invest more in digital capabilities and sustainability initiatives.
The reorganisation follows a series of challenges for Citi, including a $900 million payment error last year, a $400 million fine by US regulators for risk management failures, and a lagging performance compared to its peers. The bank reported a 12% drop in revenue and a 41% decline in net income in 2020.
Impact on UK staff
Citi, which has about 16,000 employees in the UK, did not specify how many jobs would be affected by the reorganisation. However, it said it anticipated that some roles would be eliminated and some would be changed as it aligned its organisation model with its strategy.
The bank said it would set up a consultation process with its UK staff, allowing them to give their feedback on the proposed changes. It said it would also work with the London Consultation Forum (LCF), a representative body of employees, to conduct a collective consultation process.
“We recognise the uncertainty that many of our colleagues are experiencing,” James Bardick, UK Citi Country Officer, told employees in a memo seen by Reuters. “We are moving at pace to provide clarity while following our processes and allowing for needed input from team leaders.”
The bank said it would also consult with employees at risk of redundancy on an individual basis and offer them support and assistance. It said it was committed to following all legal and regulatory requirements and treating its staff fairly and respectfully.
Reaction from analysts and unions
Analysts said Citi’s reorganisation plan was a necessary step to improve its efficiency and competitiveness in a challenging environment. They said the bank had been underperforming its rivals such as JPMorgan Chase and Bank of America in terms of revenue growth, profitability and return on equity.
“Citi has been struggling to keep up with the changing landscape of banking and has been losing market share in some key areas,” said David Hendler, founder of Viola Risk Advisors, a financial risk consultancy. “The reorganisation is an attempt to address these issues and create a more focused and nimble organisation that can adapt to the evolving needs of customers and regulators.”
However, unions representing Citi’s UK staff expressed concern over the potential job losses and urged the bank to minimise the impact on workers. They said the bank should explore alternatives to redundancies such as redeployment, retraining and voluntary severance.
“We are disappointed that Citi has decided to cut jobs in the UK as part of its global restructuring,” said Dominic Hook, national officer for finance at Unite, Britain’s largest trade union. “We will be engaging with the bank to ensure that any redundancies are kept to a minimum and that affected staff are treated fairly and with dignity.”
