Citigroup Inc. plans to pay some employees a portion of their bonuses early if they leave voluntarily. This move, led by CEO Jane Fraser, aims to prevent more significant layoffs as part of the ongoing restructuring efforts at the bank, according to Bloomberg's Sally Bakewell.
According to the source, the bank isn't providing bonuses for voluntary redundancy, which Citigroup chose not to comment on. Bloomberg News had previously reported that the bank would offer bonuses to employees volunteering to leave.
Voluntary Severance Program
Citigroup, the third-largest bank in the United States by assets, is undertaking a significant restructuring, with management currently evaluating the workforce to decide who will stay, be reassigned, or leave by November 2023. The company has offered some employees to enter a voluntary severance program in exchange for receiving their annual bonuses early.
This proposal, which the bank has sent to employees individually, states that employees who join the voluntary resignation program will receive their annual bonus ahead of schedule instead of February. Employees who accept the offer will be allowed to retain their deferred stock and receive the compensation. This news coincides with the bank undergoing a significant reorganization set to finish by the end of the first quarter of next year.
Citigroup Inc.'s Reorganization
On October 4, Citigroup's Chief Human Resources Officer Sara Wechter shared a global memo detailing the ongoing process. Some roles may undergo changes, or new positions may be created, but roles that no longer fit the company's new structure will be phased out.
Citigroup's CEO, Jane Fraser, announced a thorough restructuring to simplify the bank's organization earlier. This decision came after divesting from non-core markets and refocusing on profitable areas. Although the CEO's memo didn't mention the precise number of job cuts, it highlighted that these departures aimed to allow revenue-generating staff and dealmakers to focus more on client interactions. This overhaul anticipates a recent boost to the company's stock value, which has been underperforming. The changes will also give the CEO more direct control over the bank's businesses.
Citigroup's Forecasted 10% Job Cuts
Citigroup's reorganization, internally called "Project Bora Bora," aims to give CEO Jane Fraser more direct control, simplify the company, and enhance its stock value. The talks are in the early stages, and the potential number of job cuts might vary. Fraser's efforts to remove regional managers and streamline roles could lead to executive job cuts beyond the initially mentioned 10% of its 240,000 global workforce, cited by CNBC on Monday.
