240,000 Employees on Edge: Citigroup CEO’s Stern Job Cut Ultimatum

Earlier this month, Citigroup’s CEO, Jane Fraser, addressed investors in New York, emphasizing that the management had made “resolute, consequential, and demanding choices.”

According to the Financial Times (FT), Jane Fraser, the CEO of Citigroup, has conveyed a stern message to the institution’s 240,000 employees, urging them to “effectuate change or disembark from this journey.” This pronouncement follows closely on the heels of her announcement of the most extensive restructuring endeavor undertaken by the bank in 15 years. These modifications grant Ms. Fraser more direct oversight as she endeavors to simplify the vast Wall Street entity and bolster its market standing. Assuming leadership of the third-largest bank in the United States in 2021, she is confronted with the formidable task of diminishing risk and augmenting profitability.

FT reports that Ms. Fraser convened a town hall meeting just last week during which she implored the workforce, stating, “Align with our objectives. We possess exceedingly lofty aspirations for this financial institution, and the locomotive is set to move at an accelerated pace.” She added, “Hence, fully engage, assist us in achieving success with our clientele, collaborates in ushering forth these transformations, or make the decision to disembark.” These remarks were attributed to individuals who were present at the meeting.

Despite not divulging the precise number of positions the management intends to eliminate, Ms. Fraser’s restructuring strategy has sent shockwaves throughout the ranks. According to FT, senior executives have already departed the organization, including Eduardo Cruz, who was at the helm of Citi’s Latin American investment banking operations.

Earlier this month, while addressing investors in New York, she asserted that the management had undertaken “resolute, significant, and demanding determinations.” She was quoted by Reuters as saying, “These determinations will not garner unanimous favor within our establishment. They will undoubtedly disconcert some of our colleagues. However, I wholeheartedly endorse them…they represent the most judicious course of action for our shareholders.”

This extensive reorganization forms another crucial element in Ms. Fraser’s blueprint for enhancing profitability and rationalizing the bank since she assumed leadership. Although Citi has divested itself of various businesses and is actively addressing regulatory concerns, its stock value has lagged behind that of its peers. The bank continues to grapple with a 2020 consent order from regulators, mandating the rectification of several “persistent inadequacies” in its internal controls.