Citigroup Implements Sweeping Restructuring To Boost Performance

(RTTNews) - Citigroup is undergoing a major transformation as CEO Jane Fraser unveils a bold plan to simplify the bank's operations and drive quicker decision-making. The restructuring divides Citigroup into five core business divisions, each reporting directly to Fraser. This shift represents a significant departure from the previous setup that focused on consumer and institutional clients.

While specific job cut numbers remain undisclosed, the restructuring will likely result in workforce reductions. Fraser's aim is to reinvigorate Citigroup, which has struggled to establish a robust domestic retail banking presence, particularly since the 2008 financial crisis.

The changes are designed to eliminate complexity, enhance client service accountability, and capitalize on synergies between business units to meet medium-term targets.

Critics argue that Citigroup's previous structure fostered internal tensions and a lack of accountability, hindering the implementation of new initiatives. The reorganization signifies a crucial departure from this legacy.

Citigroup will now operate through five distinct business lines: U.S. personal banking, wealth management, investment and commercial banking, trading, and institutional services. Management of non-U.S. businesses will fall under Ernesto Torres Cantú.

Despite Fraser's efforts, Citigroup's stock has declined roughly 40 percent since she took the helm in March 2021, making it the weakest performer among major banks.

Citigroup's stock valuation is the lowest among U.S. banking giants, trading at around $41 per share, reminiscent of levels during the 2008 financial crisis.

While some rivals have downsized amid reduced Wall Street activity, Citigroup's workforce has grown to 240,000 employees as of June, up 4 percent from the previous year.

Fraser addressed the impending job cuts in a memo, with plans to complete the reorganization by the first quarter of the upcoming year.

This restructuring underscores Citigroup's commitment to reshape its operations and improve its competitive position in the evolving financial landscape.