In 2022, Citi recruited 27 junior bankers for its beachside office on Spain’s Costa del Sol, offering lower pay with a more relaxed schedule than the typical 80- to 100-hour workweeks in the industry. The closure of this program indicates a shift of leverage from junior talent back to employers.
Young investment bankers traditionally faced a choice between long hours and high pay. However, amid the post-COVID talent competition, Citigroup introduced a new approach by providing some junior analysts with a more balanced schedule and a position on the Costa del Sol.
On Wednesday, Citi declared the closure of its Málaga office as part of an effort to streamline the firm and improve operations, potentially reflecting a broader economic trend towards efficiency that may prompt young bankers to prioritize job security over work-life balance.
Benjamin Granger, chief workplace psychologist at Qualtrics, mentioned that this situation is part of an ongoing dynamic, where employers are regaining leverage, especially if economic conditions worsen and borrowing costs remain high.
Citi initially selected 27 analysts out of over 3,000 applicants in 2022 for the Málaga initiative. The pay was about half of the $100,000 starting salaries seen in major financial hubs, but they were assured work-free evenings and weekends.
Citi reported that six Málaga employees would leave the firm, while those at its main Spanish office in Madrid remain unaffected. The company emphasized its focus on colleague mobility and the integration of hubs, with successful transitions to positions in London and Paris.
Manolo Falcó, Citi’s global co-head of investment banking, had stressed that the Málaga program aimed to reduce churn by offering better work-life balance, amid industry challenges like losing talent to private equity and tech.
Economic efficiency is a priority, particularly with tariff uncertainties affecting expected M&A and IPO recoveries. Preliminary data from Dealogic shows a 6% decline in global investment banking revenue year-to-date, although Citi’s fees increased from $1.25 billion to $1.36 billion.
Unlike competitors enforcing strict return-to-office policies, Citi allows hybrid work, seeing this flexibility as a potential competitive and recruitment advantage. Nevertheless, the industry’s working condition concerns persist, highlighted by recent tragedies of junior bankers facing extreme work hours.
A 2024 survey by Wall Street Oasis indicated first-year analysts averaged 74 hours per week. Some critics argued that Citi’s Málaga office was not a true solution to the demanding schedules that many junior bankers face. Such sentiments were echoed in a 2022 letter to the Financial Times, suggesting genuine flexibility and output-based pay could offer better resolutions.
This report is based on an article originally featured on Fortune.com.
