Citigroup CEO Jane Fraser has delivered a stern message to the bank’s workforce, urging employees to either embrace her sweeping overhaul of the organization or step aside as she embarks on a journey of job cuts and restructuring to streamline the bank’s management structure.
This resolute message represents a shift in tone for Fraser, who had previously cultivated an image of approachability during her tenure as Citi’s leader. Her call to action came on the heels of her announcement of the most significant restructuring the bank has seen in 15 years, as she strives to pivot Citi towards a model focused on business units rather than geographical regions.
Fraser’s message to employees was crystal clear: “Get on board. We have incredibly high ambitions for this bank and, the train, it’s gonna move fast. So lean in, help us win with clients, help us deliver the changes, or get off the train.”
Fraser took the helm of the third-largest U.S. bank in 2021 with the promise of making the institution more profitable and less risky. The departure of Paco Ybarra, a 36-year veteran with significant influence at Citi, presented Fraser with an opportunity to implement her restructuring plans and gain more day-to-day control over the bank’s operations.
One notable aspect of Fraser’s restructuring plan is the absence of specific details regarding job cuts or cost reduction targets, causing internal frustration among employees. Additionally, a permanent head for Citi’s investment, commercial, and corporate bank, a crucial position in the new management structure, has yet to be named. To address this gap, Citi has enlisted executive search firm Egon Zehnder to identify external candidates for the role.
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Since the announcement of the restructuring, several senior executives have already departed from Citi, and more departures are expected in the coming weeks. Eduardo Cruz, who headed Citi’s Latin American investment banking operations, is among those who have left the bank, along with European unit head Kristine Braden.
In the UK, employees were informed through a memo that the bank would initiate a review process leading to a “reduction in roles,” although the exact number of positions to be eliminated out of the 16,000 UK-based staff remains undisclosed. This uncertainty has left many within the organization anxious about how the changes will impact their roles and the bank’s future direction.
Despite the internal apprehension, there is enthusiasm among some Citi employees for Fraser’s efforts to reinvigorate and streamline the bank, which many believe has been burdened by bureaucracy. Some also hope that these changes will boost the bank’s share price, which has declined by roughly one-third since Fraser assumed her role as CEO.
One senior Citigroup banker noted, “There’s lots of logic to what she is doing because we were just running too much cost in this business, and we need to get to the right place.”
Central to Fraser’s strategy for revitalizing Citi is the dismantling of the geographical focus that has been a fundamental part of the bank’s organizational structure and identity for decades. Fraser aims to replace the old model, where decisions had to navigate multiple layers of regional and product-based leadership, with a more streamlined approach.
As part of this reorganization, Citi has appointed Ernesto Torres Cantú as the sole international head for all units outside the U.S., eliminating the previous structure of three regional chiefs.
Citigroup emphasizes that it does not plan to exit any of the countries in which it operates, and Fraser remains committed to the bank’s international focus as a key differentiator from its competitors. However, the removal of much of Citi’s geographical management is seen as a significant avenue for cost reduction and simplification.
Fraser explained, “When we formed our regional organization many, many years ago, it was a very different bank. We just don’t need that type of heavy management structure and local governance and processes.”
In conclusion, Citigroup’s CEO Jane Fraser has embarked on a bold restructuring effort aimed at streamlining the bank’s operations and shedding excess costs. While this has created uncertainty and unease among employees, it also represents an opportunity for the bank to become more agile and competitive in a rapidly changing financial landscape. Fraser’s resolute message to employees underscores her commitment to this transformation, signaling a new chapter for Citigroup.