Citigroup is on the cusp of firing thousands of workers, following through with a restructuring plan previously disclosed by Chief Executive Jane Fraser, according to CNBC. These layoffs could represent one of Wall Street’s deepest rounds of layoffs to date.
Fraser’s reorganization plan, known internally as “Project Bora Bora,” would result in at least 10% headcount reductions to several of the bank’s major businesses, according to insiders. They noted talks are still underway and subject to change.
“We’ll be saying goodbye to some very talented and hard-working colleagues,” the exec warned in a recent memo.
As of Sept. 30, Citigroup has 240,000 employees. The bank has added 40,000 employees since the fourth quarter of 2019.
One Wall Street analyst told CNBC that Fraser “needs to do something big,” there is a strong possibility the job cuts could be much larger than employees expect:
“The only thing she can do at this point is a really substantial headcount reduction.
“She needs to do something big, and I think there’s a good chance it’ll be bigger and more painful for Citi employees than they expect,” James Shanahan, an Edward Jones analyst, said.
Fraser faces the challenges of a surge in headcount over the last several years, while competitors have been cutting jobs this year. She assumed leadership in early 2021, and since then, crucial investor metrics, such as the price-to-tangible book value ratio, trade around .49 – or about half the average of other US peers.
One banker who recently left Citigroup told CNBC that “morale is super, super low,” and many “are saying, ‘I don’t know if I’m getting hit, or if my manager is getting hit.’ People are bracing for the worst.”
Another person familiar with Project Bora Bora said the number of layoffs would be finalized by the end of the month and could exceed 10% to “eliminate regional managers, co-heads, and others with overlapping responsibilities.”
A Citi spokesperson told the media outlet, “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.”
News of Citi potentially unleashing monster job cuts in the near term comes after several Wall Street firms have been laying off workers this year. Just last week, Charles Schwab reduced its workforce by 2,000, joining the ranks of UBS Group, Goldman Sachs, and several other banks that have been trimming their headcount.
According to Bloomberg data, the number of times “bank layoffs” appear in US news stories has spiked.
This wave of downsizing comes as banks grapple with mounting economic uncertainty ahead of 2024.