Citigroup (NYSE:C)'s CEO, Jane Fraser, has initiated a significant restructuring of the bank, marking the most substantial overhaul in 15 years. The plan aims to shift the bank's focus from geographical divisions to its individual business units. The restructuring strategy has been met with mixed reactions internally due to uncertainty surrounding job cuts and cost reduction targets.
Fraser, who assumed her role as CEO in 2021, has been working towards making the bank more profitable and less risky. The exit of Paco Ybarra, a long-time veteran with significant influence within Citigroup, has allowed Fraser to increase her day-to-day control and implement the reorganization.
The restructuring has already resulted in several high-profile departures. Among those leaving is Edwardo Cruz, head of Citi's Latin American investment banking operations. Other notable exits include executives chiefly involved in Citi's non-US operations such as Kristine Braden, former head of the European unit.
In the UK, where Citigroup employs 16,000 people, employees were informed via a memo about an impending review process that would likely lead to job reductions. However, specific numbers have not been disclosed.
A crucial element of Fraser's strategy involves dismantling the geographical focus that has been integral to Citigroup's organizational structure for decades. This change is expected to simplify operations and reduce costs. Ernesto Torres Cantú has been appointed as the sole international head of all units outside the US, replacing the previous model of three regional chiefs.
Despite these changes, Citigroup maintains it will continue operating in all countries where it currently has a presence. Fraser remains committed to maintaining the bank's international focus as a distinguishing factor from competitors.
Critics have argued that Citigroup's previous structure often led to overlapping leadership and bureaucratic inefficiencies. The new approach is expected to offer clearer performance visibility for individual business units.
While some employees are concerned about the impact of these changes on their roles, others are optimistic that Fraser's efforts to streamline the bank will rejuvenate Citigroup and potentially boost its stock price, which has dropped by approximately a third since Fraser's tenure began.
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