Citi has cut 7,000 people so far, which is 2,000 more than expected
Citi has finished stage one of its20,000 job cuts and it seems to have been more zealous than planned.
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Citi CEO Jane Fraser said today that the bank has so far reduced headcount by 7,000 people, mostly due to a process of «organizational simplification» which was due to end in the first quarter.
Under this process, the bank was due to cut five layers of management, reducing the layers from 13 to eight, and to make everything a little less complicated. Accordingly, bank said today «over 98% of the bank now operates under eight layers (excluding CEO)» and that the «average span of control for managers» has been doubled. More than half of internal governance committees have been «eliminated.»
However, in its initial projections for the simplification cuts, Citi said that it expected to reduce 5,000 jobs. It seems to have overshot.
Despite the zeal for taking out managerial staff, the return on equity at the bank doesn't appear to be journeying in the right direction. It was 7.5% in Q1 2024, versus 10.9% the previous year. The bank said it spent $258 million on «repositioning costs» relating to its " efficiency efforts" and that the savings will allow it to «continue to fund additional investments in the transformation.»
The performance of Citi's bankers and traders varied by team. While its debt and equity capital markets bankers had a good quarter, much like JPMorgan's, M&A revenues were down 17% year-on-year. In the markets business, macro (rates and currencies trading) revenues were down 21% year-on-year while credit trading and other fixed income revenues were up 26%. Revenues in Citi's controversial equities team were up 5%, and the bank said there was «growth
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