Citigroup CEO Jane Fraser’s plan for a corporate overhaul, called “Project Bora Bora,” has sparked discussions of job cuts of at least 10% in several major businesses within the bank, according to sources. The restructuring is aimed at eliminating regional managers, co-heads, and other positions with overlapping responsibilities. Executives may face even deeper cuts, leaving employees anxious and worried about their future. Citigroup has been underperforming compared to its peers, and Fraser is under pressure to turn things around. The bank’s stock has fallen and trades at a lower valuation than its top competitors. To address these challenges, Fraser is contemplating a substantial reduction in headcount. However, the exact number of job losses is yet to be determined and will be announced in January.
Fraser’s plan is crucial for Citigroup’s success as the bank has struggled with stock underperformance and missed targets for years. Industry analysts believe that a significant reduction in headcount is necessary for Citigroup to improve its returns and recover its stock value. While revenue growth may be challenging due to the slowing U.S. economy, cutting costs is seen as the most feasible option to enhance profitability. If Fraser’s efforts fail to deliver the desired results, there may be increased pressure to take more drastic actions, including dismantling the company. With the appointment of Titi Cole, who has experience in managing expenses and headcount at Wells Fargo and Bank of America, to lead the reorganization, Citigroup aims to streamline its operations and achieve its financial goals.
The ongoing discussions about potential job cuts have affected employee morale, with many feeling uncertain about their future. Fraser’s plan is expected to eliminate regional managers, co-heads, and other positions with overlapping responsibilities. Operations staff supporting businesses that have been divested or reorganized are also at a higher risk of layoffs. The ultimate number of job losses will be determined in the coming weeks as the reorganization project progresses. Investors will closely monitor not only the number of layoffs but also the bank’s ability to reduce expenses. Citigroup has faced challenges in the past with cost management, and investors will need convincing evidence of sustainable expense reduction. The project’s primary goal is to remove unnecessary layers and improve client service, although cost savings are an important aspect. Citigroup is expected to release an update on the plan’s progress and its financial impact in January alongside its fourth-quarter earnings report.
