The most powerful woman on Wall Street may be preparing to lay off 10% of her staff, according to a new report.
Earlier this year, Citigroup CEO Jane Fraser announced that the bank would make sweeping internal changes, which she insisted would streamline the corporate hierarchy and streamline decision-making processes.
CNBC Managers and consultants working on the bank’s restructuring have since discussed laying off at least one in 10 workers at several of its key businesses, it reported on Monday.
Citing sources with inside knowledge of the ongoing operation, CNBC He noted that the number of job cuts may change in the coming weeks, as the talks are still in their early stages.
according to CNBCCitigroup’s restructuring process became known internally as “Project Bora Bora.”
A Citigroup spokesperson said in an emailed statement on Tuesday that the bank is “committed to delivering the full potential of the bank and delivering on our commitments to our stakeholders.”
“We acknowledge that the actions we are taking to reorganize the company involve some difficult and consequential decisions, but they are the right steps to align our structure with our strategy and deliver on the plan we shared at our 2022 Investor Day.” He said.
A clear case for change
At Citigroup’s investor day last year, Fraser said there was a “clear case for change at Citigroup”.
“We are acting accordingly, defining the long-term future of our company and addressing the issues that have held us back,” she told investors at the time. “It will take time, but I am fully committed to doing the hard work to get this bank where it needs to be.”
Fraser — who takes over the bank’s top job in 2021 — is the first woman to lead the Wall Street bank.
The bank touts its accomplishments to date including launching a “multi-year strategy to increase Citigroup’s profitability and better position the company with respect to the speed and complexity of the digital age.”
Aside from the looming layoffs, its restructuring included closing some of Citigroup’s international businesses and eliminating a layer of senior management. At a conference two months ago, she described the strategy as “the most significant changes we have made in how Citi is organized and run in nearly 20 years.”
Fraser first told Citigroup’s 240,000-strong workforce that layoffs were looming in September, telling staff that the bank would “say goodbye to some very talented and hard-working colleagues” as it transformed its operations. The number of jobs that will be cut has not been determined at that time.
Days later, she gave employees resisting the bank’s reform an ultimatum: “Get on or get off the train.”
Fraser is under pressure to reform Citigroup, America’s third-largest bank, after it received a consent order from regulators in 2020 requiring it to correct a number of “serious and long-standing deficiencies” in its internal operations.
The company is also facing share price issues, with its shares continuing to sell for less than half their tangible book value. Investors use price-to-tangible book ratios to measure a company’s market value against its tangible assets. This means the stock lags far behind many of its Wall Street rivals, such as Wells Fargo and JPMorgan.
A number of Wall Street heavyweights such as Goldman Sachs and Morgan Stanley have already cut jobs this year amid ongoing economic uncertainty.