June 13, 2024

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Citigroup considers deep job cuts in Project Bora Bora

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When Citigroup CEO Jane Fraser announced in September that her sweeping corporate overhaul would result in an undisclosed number of layoffs, a jolt of fear ran through many of the bank’s 240,000 souls.

“We’ll be saying goodbye to some very talented and hard-working colleagues,” she warned in a memo.

Employees’ concerns are justified. Managers and consultants working on Fraser’s reorganization — known internally by its code name, “Project Bora Bora” — have discussed job cuts of at least 10% in several major businesses, according to people with knowledge of the process. The talks are early and numbers may shift in coming weeks.

Fraser is under mounting pressure to fix Citigroup, a global bank so difficult to manage that its challenges consumed three predecessors dating back to 2007. Already a laggard in every metric that matters to investors, the bank has fallen further behind rivals since Fraser took over in early 2021. It trades at a price-to-tangible book value ratio of 0.49, less than half the average of U.S. peers and one-third the valuation of top performers including JPMorgan Chase.

“The only thing she can do at this point is a really substantial headcount reduction,” James Shanahan, an Edward Jones analyst, said in an interview. “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.”

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Citigroup’s stock has been mired in a slump under CEO Jane Fraser.

If Fraser decides to part with 10% or more of her workforce, it would be one of Wall Street’s deepest rounds of dismissals in years.

Burdened by regulatory demands that hastened the retirement of her predecessor Mike Corbat, Citigroup’s expenses and headcount have ballooned under Fraser. While competitors have been cutting jobs this year, Citigroup’s staff levels remained at 240,000. That leaves Citigroup with the biggest workforce of any American bank except the larger and far more profitable…

2023-11-06 15:39:45

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