It vowed to to provide further insights on “Project Bora Bora” when the company reports fourth-quarter earnings on Jan. 12, 2024.
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Fraser’s approach —realigning senior banking roles and maintaining key personnel — aims to stabilize and stimulate market share expansion amidst these shifts. Last month, Citi scrapped its two core operating units — focused on institutional and consumer clients — and reorganized itself into five key business units including trading, banking, services, wealth management and US consumer offerings. Australia and New Zealand country head Mark Woodruff now reports to Hong Kong-based Angel Ng, who oversees Citi’s North Asian and Australian “cluster,” people familiar with the management overhaul told AFR Weekend. The impending job cuts have stirred anxiety among Citi’s staffers, one banker who recently left the company and has kept in touch with former colleagues told CNBC. Local positions under threat included back-office roles, such as compliance and risk, while Citi’s broker-dealer arm could have some staff reductions, people familiar with the reorganisation told The Australian Financial Review. The company is also contending with share price issues, with its stock continuing to sell at less than half its tangible book value.
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“As we’ve said previously, we are committed to delivering the full potential of the bank and meeting our commitments to our stakeholders,” a spokesperson for the bank told The Post. Citi’s local bosses have new reporting lines as the Wall Street bank’s sweeping reorganisation reshapes its offices around the world. Citigroup, United States’ third-largest bank by assets, has been plagued with the decades of stock under performance and missed financial targets.
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The ramifications of Project Bora Bora extend beyond mere numbers; they signify a profound transformation in Citi’s organizational ethos and market strategy. While the initiative aims to enhance profitability and market responsiveness, it has sparked internal debates and industry skepticism. CNBC reported on Monday that managers and consultants working on the bank’s restructuring had since discussed laying off at least one in 10 workers across several of its major businesses. Citi has said it will likely provide more details about job cuts in January, when it reports fourth-quarter results. Citigroup’s stock (C) fell by 0.8% as word surfaced of the cost-cutting effort code named Project Bora Bora, according to the report by CNBC-TV, which cites people with knowledge of the process. Citigroup Inc. is planning layoffs of at least 10% in some departments as part of a previously announced restructuring under Chief Executive Jane Fraser, according to a report on Monday.
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Should the impending layoffs see Fraser parting with an additional 10% of her staffers — roughly 24,000 workers — it would be one of the deepest job cuts Wall Street has seen in years, CNBC reported. Whether you’re dealing with a corporate restructuring, looking to improve organizational resilience, or seeking to understand broader industry trends, tailored advice and strategic insights can make a big difference in decision-making and outcomes. The parallels drawn between Citi’s restructuring and similar trends across industries highlight the universal challenges and opportunities that come with organizational change and market adaptation. HRForecast automation insights can soften job cuts and exits through strategic, phased changes.
Investors use price-to-tangible-book value ratios to measure a firm’s market value against its hard assets. That means the stock is lagging well behind many of its Wall Street competitors, such as Wells Fargo and JPMorgan. Citing sources with inside knowledge of the ongoing process, CNBC noted that the number of job cuts could shift in the coming weeks, as talks were still in the early stages. One stock analyst told CNBC that Fraser “needs to do something big” and that there’s a good change the job cuts will be larger and more painful than employees expected.
Considering the findings of HRForecast opens a critical view of labor market dynamics and strategic personnel management in the banking sector. For example, the analysis of risk management in banking outlined in March 2023 highlights the need for careful risk management and strategic workforce planning during turbulent times. HRForecast advocates for a holistic HR strategy that responds to organizational change, focusing on communication, talent retention, and adaptive leadership. Fraser first told Citigroup’s 240,000-strong workforce that layoffs were looming in September, notifying staff that the bank would be “saying goodbye to some very talented and hardworking colleagues” as it shakes up its operations. Within Citi, the absence of a permanent investment banking head and upcoming changes in the equities and wealth management divisions signal a period of uncertainty and transition.
The American multinational investment major has been an under performer in the financial market, compared to its rivals. Citi reportedly tapped Boston Consulting Group to assist in the reorganization, sources told CNBC. At its current staff levels, Citi boasts the second-largest workforce of any American bank, beat only by the far-more-profitable JPMorgan Chase, which has a US workforce of about 294,000. It’s all part of “Project Bora Bora,” which Fraser announced in September to “eliminate unnecessary complexity across the bank,” she wrote in a statement at the time. Every month, we’ll send you a curated newsletter with our updates and the latest industry news. Wall Street’s most powerful woman could be gearing up to let 10% of her staff go, according to a new report.
Citigroup CEO Jane Fraser has implemented a massive reorganization known internally as “Project Bora Bora,” which is set to include a hefty round of layoffs in the coming months, according to a report. A number of Wall Street heavyweights such as Goldman Sachs and Morgan Stanley have already been cutting jobs this year amid ongoing economic uncertainty. Fraser is under pressure to fix Citigroup, America’s third-biggest bank, after it received a consent order from regulators in 2020 demanding it correct a number of “serious and longstanding deficiencies” in its internal operations. Earlier this year, Citigroup CEO Jane Fraser announced that the lender would be making sweeping internal changes, which she insisted would smooth out corporate hierarchies and streamline decision-making processes. 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,” remarked James Shanahan, an Edward Jones analyst, while interacting with the CNBC.
For a bank like Citi, this transformation is underscored by its significant investment in advanced technology infrastructure, a key step toward a more efficient and data-driven operating model. Integrating Generative AI (GenAI) technologies into Citi’s data processing system is particularly noteworthy. GenAI frees data professionals to spend more time on strategic analysis and innovation by automating routine tasks like data cleansing and preparation. This automation extends to predictive analytics, which enhance the bank’s predictive and decision-making capabilities and are critical to risk management and customer engagement. While Citi focuses on profitability, integrating technologies such as GenAI opens up the opportunity to mitigate significant job cuts while offering a more sustainable approach to restructuring.
- Citigroup CEO Jane Fraser has implemented a massive reorganization known internally as “Project Bora Bora,” which is set to include a hefty round of layoffs in the coming months, according to a report.
- Citigroup Inc. is planning layoffs of at least 10% in some departments as part of a previously announced restructuring under Chief Executive Jane Fraser, according to a report on Monday.
- Support staff in compliance and risk management, and technology staff working on overlapping functions are at risk of being laid off, Reuters mentioned.
- The venture currently has the biggest banking workforce in the United States, apart from the larger and profitable JPMorgan.
- While Citi focuses on profitability, integrating technologies such as GenAI opens up the opportunity to mitigate significant job cuts while offering a more sustainable approach to restructuring.
Citigroup’s ambitious restructuring strategy, Project Bora Bora, marks a key shift in the bank’s operating paradigm under CEO Jane Fraser. This transformational initiative is characterized by large-scale job cuts, simplifying management structure, exiting several consumer banking markets, and investing in technology upgrades. We’ll take a closer look at the ins and outs of the Bora Bora project, comparing it to industry standards. Ultimately, we will provide analysis and solutions to shed light on the strategic imperatives in the banking sector.
Fraser put Titi Cole, Citigroup’s head of legacy franchises, in charge of the reorganization, as per the reports. Cole joined Citigroup in 2020 and is a veteran in the American banking field, as she had successfully served financial organisations like Wells Fargo and Bank of America. Since the retirement of her predecessor Mike Corbat, Citigroup’s expenses and headcount have ballooned under Fraser.
Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data. Internally, Titi Cole, Citi’s head of legacy franchises, was picked by Fraser to head “Project Bora Bora,” insiders told the outlet. Edward Jones analyst James Shanahan told CNBC that Fraser “needs to do something big” to catch up to rivals and please investors.
In fact, amid the other American banks downsizing their staffers, Citigroup’s staff levels, by October 2023, remained at 240,000. The venture currently has the biggest banking workforce in the United States, apart from the larger and profitable JPMorgan. The bank has yet to divulge how many job cuts are expected with the reorganization, or an estimate of the number or financial impact.
As per the analysts, Citigroup needs to increase revenue, use its balance sheet more efficiently and cut costs. After Fraser taking over in early 2021, Citi’s stocks have been trading at a price-to-tangible book value ratio of 0.49, less than half the average of its United States peers and one-third the valuation of top performers including JPMorgan Chase. “Preparations for Monday’s (November 20, 2023) announcements were communicated verbally in meetings, according to a source familiar with the situation who was not authorised to speak publicly. Some staff may be able to apply for other roles at the bank,” commented Reuters, which reported extensively on the issue. The 56-year-old Citi boss has set the goal of boosting Citi’s returns to at least 11% within the next few years, and cutting costs with a hefty payroll reduction would certainly help.
Support staff in compliance and risk management, and technology staff working on overlapping functions are at risk of being laid off, Reuters mentioned. Citi declined to confirm CNBC’s report on headcount reduction when contacted by The Post on Monday. At the same time, the bank axed 60 management committees in a move to cut costs and streamline operations in what’s poised to become its largest restructuring in two decades.