Citigroup,
the holding company of America’s third-largest bank by assets, is considering letting go of at least 10% of its 240,000 employees, CNBC reported on Monday citing people with knowledge of the process. It could be one of Wall Street’s largest rounds of layoffs in years.
Citigroup stock (ticker: C) is down 0.6% in Monday’s trading.
Citigroup didn’t confirm CNBC’s report with Barron’s, but noted that it would provide more information at the fourth-quarter-earnings report in January.
“We’ve acknowledged the actions we’re taking to reorganize the firm involve some difficult, consequential decisions, but they’re the right steps to align our structure to our strategy and deliver the plan we shared at our 2022 Investor Day,” the bank said in a statement.
Citigroup CEO Jane Fraser had warned about the layoffs in September in an internal memo as part of her plan to fix the bank’s mounting expenses, internally known as “Project Bora Bora,” according to CNBC. Numbers could change in coming weeks, the report noted.
Citigroup’s expenses and head count have been growing in the past years, especially since Fraser took over the reins in early 2021 after Mike Corbat retired. The firm has the biggest workforce of any American bank except for
JPMorgan Chase
(JPM), which employed 308,669 as of the end of the third quarter. JPMorgan has 29% more employees than Citigroup, but also has 65% more assets.
Citigroup’s efficiency ratio, which shows how well a bank controls its noninterest expenses compared with revenue, is around 68%, much higher than the 62% at
Bank of America
(BAC) and
Wells Fargo
(WFC) and 53% at JPMorgan, according to data compiled by Piper Sandler. A lower number means a bank is more efficient.
Investors have taken note. Citi stock has been underperforming for years, including a 40% slump since Fraser became CEO. Shares are now trading at a price-to-book ratio of 43%, one third the valuation of JPMorgan, and less than half the average of its peer group, according to data compiled by Piper Sandler.
Fraser has vowed to improve Citigroup’s returns by boosting revenue and cutting costs. The jobs cuts could include regional managers, co-heads and others with overlapping responsibilities such as chiefs of staff and chief administrative officers, CNBC reported.
Write to Evie Liu at [email protected]
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