NEW YORK - Citigroup Inc (NYSE:C). has commenced a significant restructuring effort that includes job cuts potentially affecting up to 10% of its workforce, as part of CEO Jane Fraser's plan to streamline the organization. The changes involve reducing management layers from thirteen to eight and cutting down the number of committees by about 13%. These moves come in response to regulatory pressures and a substantial fine that highlighted the need for improved processes within the bank.
The restructuring initiative began this Wednesday, with the departure of chiefs of staff, managing directors, and some junior roles. Further job reductions are anticipated in February, signaling a broad reshaping of the bank's staff across various levels. This development follows a series of high-profile exits from Citi. Notably, Donna Gordon, who served as the global head of regulatory response and oversight, has parted ways with the financial institution. Her departure comes after Citi faced a $400 million fine in 2021, which demanded enhancements in its operational processes.
In addition to Gordon's exit, there have been other significant changes in personnel at Citi. Last month, Ahu Gures Altintas concluded her nearly two-decade tenure at Citi to join Bank of Montreal as a Credit Executive. Moreover, last week Angelique Roberts, formerly Citi's head of sanctions compliance for Latin America and with experience at the National Security Council, transitioned to BNY Mellon (NYSE:BK) as global head of sanctions compliance.
Citi's leadership is taking decisive action to address the challenges it faces by simplifying its structure and improving oversight. The current layoffs are part of this broader strategy aimed at fortifying the bank's position and ensuring compliance with regulatory standards. As these changes unfold, additional waves of job cuts are expected to reshape the organization further in the coming months.
InvestingPro Insights
As Citigroup Inc. embarks on its restructuring journey, certain InvestingPro data and tips provide a broader picture of the financial institution's current standing. With a substantial market cap of $85.95 billion, the bank is indeed a prominent player in the industry. Yet, it's worth noting that the bank's P/E ratio stands at 7.12, suggesting a low earnings multiple, which could be a reflection of the challenges it's currently facing.
InvestingPro Tips highlight a few key points. Firstly, while the bank has maintained dividend payments for 13 consecutive years, poor earnings and cash flow could potentially force dividend cuts in the future. Secondly, the bank's revenue growth has been accelerating, a positive sign amid the restructuring efforts. However, the declining trend in earnings per share and the expectation of a drop in net income this year could be areas of concern for investors.
Investors might find it beneficial to know that six analysts have revised their earnings upwards for the upcoming period. This could be indicative of a potential turnaround in the bank's performance, despite the current challenges.
For those interested in more in-depth insights and tips, InvestingPro offers a wealth of additional information, with over 10 more tips available for Citigroup Inc. And the good news is, InvestingPro subscription is now on a special Black Friday sale with a discount of up to 55%. This could be a great opportunity to gain access to valuable investment insights and make informed decisions.
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