Citigroup to Cut up to 200 IT Jobs in China to Enhance Risk Management
In July 2024, Citigroup was fined $136 million by U.S. regulators for failing to make adequate progress in resolving data management issues. The IT restructuring plan highlights C's intent to address regulatory requirements while simplifying its internal processes.About 100 IT staff at Citigroup Services and Technology China, Citigroup's wholly owned Shanghai subsidiary, were told this week that their contracts will not be renewed, and another 100 will receive layoff notices soon, per people familiar with the matter. The workers are part of Citigroup Services and Technology China, founded in 2002, which supports the bank's business in 20 countries and regions, including the United States, the United Kingdom, and Hong Kong.Per Citigroup's spokesperson, the reduction of IT contractor jobs in China has no impact on Citigroup's overall business strategy or its commitment to both local and global clients.Per Reuters, Tim Ryan, Citigroup's head of technology, previously stated that the bank plans to reduce the percentage of contractors working on its IT staff from 50% to 20%.
Citigroup is undergoing a major organizational overhaul, including 20,000 job cuts globally by 2026 as part of its strategy to streamline operations and improve efficiency. The restructuring aims to simplify governance, reduce management layers, and enhance profitability. These strategic moves align with Citigroup's broader goal of enhancing operational efficiency, with expected annualized run rate savings of $2-2.5 billion by 2026.Apart from this major organizational realignment, Citigroup has been emphasizing growth in core businesses by shrinking international operations. In line with this, the bank completed its separation from the institutional banking business in Mexico, as well as its consumer, small, and middle market businesses, in December 2024. In June 2024, Citigroup also divested its onshore consumer wealth portfolio in China to HSBC Holdings plc. Additionally, the bank has exited retail banking operations in the UK, shifting its focus toward expanding personal banking and wealth management services.
Further, as part of its strategy, Citigroup continued to make progress with the wind-down of its Korean consumer banking operations and its overall operations in Russia, as well as preparations for a planned initial public offering of its consumer banking and small business and middle-market banking operations in Mexico.
Shares of Citigroup have gained 11.9% over the past six months compared with the industry's growth of 7.2%.
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Currently, C carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
This month, Reuters reported that HSBC Holdings plc HSBC plans to reduce its workforce in France by 348 jobs, accounting for approximately 10% of its staff in the country. This move is part of the overall cost-cutting strategy by CEO Georges Elhedery, aiming to reduce the expense by $1.5 billion by 2026.The job reductions will be implemented through a voluntary redundancy scheme, allowing employees to exit on mutually agreed terms. These cuts are part of a broader program of HSBC aimed at simplifying operations and enhancing efficiency in an increasingly competitive landscape.Similarly, last year, per a Bloomberg report, UBS Group AG UBS planned to cut jobs in France amid the country's sluggish economic growth and ongoing efforts to integrate Credit Suisse ('CS') following its acquisition in June 2023.UBS informed that the bank's plan to cut jobs is being presented to its works council and measures to support the affected staff were to be developed in collaboration with employee representatives.
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