Following a pretty terrible set of results in its institutional client unit (investment bank), Citi has just announced a new set of job cuts, starting the week of January 22nd.
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In a memo to Citi staff, sent today, CEO Jane Fraser said euphemistically that during the week of January 22nd, the bank will begin its "next layer of changes" to how the firm is organized. Citi is "on track to conclude the reorganization by the end of the first quarter this year," Fraser added.
In the presentation accompanying today's fourth quarter results, Citi said today that it plans to cut headcount by 20,000 people or 10% of its total as it simplifies the organization. Fraser and her management team are in the process of reducing levels of management from 13 to eight, as well as reducing pointless meetings, and closing municipal bond and distressed debt trading.
The Financial Times says Citi's results were the worst for 15 years. The markets business made a $134m loss in the fourth quarter as fixed income revenues declined 25% by virtue of what the bank described as lower revenues in rates and FX trading by virtue of lower volatility, a significant slowdown in December and the impact of the devaluation of the Argentinian peso. As we reported yesterday, Citi has delayed bonus announcements as a result.
As Citi cuts people, it's working its way down the levels in its hierarchy. Two levels were cut last year, when Citi says it trimmed headcount by 7,000 people and amassed $100m in severance charges. This year, it expects to spend another $700m on severance and restructuring combined, suggesting things will hot up soon.
Writing in today's memo, Jane Fraser said she hoped people "were able to find some time over the holidays to recharge because our critical work of rebuilding a winning bank continues apace."
Citi is moving "quickly, but we are doing it thoughtfully," Fraser added. Citi declined to comment. People are already leaving the bank this year. Yesterday, Bloomberg reported the disappearance of Paul Bakunowicz in FX trading.
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