This post was originally published on this site
https://i-invdn-com.investing.com/trkd-images/LYNXMPEJ8D11B_L.jpg
NEW YORK (Reuters) – As Citigroup (NYSE:C) embarks on a sweeping reorganization, support staff in compliance and risk management are among the most likely to lose their jobs, according to sources familiar with the situation.
Technology staff working on overlapping functions are also at risk of being laid off, one of the people said.
Citi managers are already convening discussions with employees about potential layoffs, according to the sources, who declined to be identified discussing personnel matters. One-on-one meetings about departures were also starting, one of the sources said.
Citigroup declined to comment.
The conversations come after the third largest U.S. bank announced on Wednesday it will strip out a layer of management and cut jobs. CEO Jane Fraser, who called the reorganization Citi’s biggest in almost two decades, will gain more direct control over its businesses in an effort to boost profits and the stock price.
Executives overseeing revenue-producing businesses held calls on Wednesday to explain the changes and reassure their teams that the overhaul would reduce bureaucracy and prioritize profit-making activities, one source said.
The bank is still dealing with a 2020 consent order by regulators demanding it fix several “longstanding deficiencies” in its internal controls.
“Simplifying the organization will also advance the execution of Citi’s transformation, the firm’s top priority,” the company said in a statement on Wednesday.
Citigroup has invested heavily in recent years in technology systems to increase risk controls and compliance to address the consent order, one of the sources said. But the company still employs many people with overlapping functions and redundant technology systems, one of the sources said.
“They have been very careful and deliberate in what they do, especially because the risk and control transformation must work,” said Moody’s (NYSE:MCO) senior vice president Peter Nerby, the responsible for rating Citi.
Under the new structure, the heads of Citi’s five major businesses will report directly to the CEO. The bank will also cut regional leadership roles outside North America.
Citi had 240,000 employees at the end of the second quarter. That compares with headcounts of about 216,000 at Bank of America and 234,000 at Wells Fargo, the second and fourth largest U.S. lenders, respectively.
While the scale of the job cuts is still unclear, Fraser told staff in a memo Wednesday that the departures would enable producers and dealmakers to focus their time on clients and driving results.
“We’ll be saying goodbye to some very talented and hard-working colleagues,” she wrote.
