Managers and consultants working on Citigroup CEO Jane Fraser’s corporate reorganization, known as “Project Bora Bora,” have discussed job cuts of at least 10% in several major businesses, according to sources. Executives will see cuts beyond 10% due to Fraser’s push to eliminate regional managers, co-heads, and others with overlapping responsibilities. These potential layoffs have left employees worried, as Citigroup has struggled to compete with its rivals and its stock has underperformed. Fraser is under pressure to fix the bank and has vowed to boost returns, with expense cuts likely being the biggest lever to pull.
Fraser’s plan to potentially part with 10% or more of the workforce would result in one of Wall Street’s largest rounds of dismissals in years. Citigroup’s expenses and headcount increased under Fraser’s predecessor, and while competitors have been cutting jobs, Citigroup’s staff levels remained the same. Fraser needs to increase revenues, use the bank’s balance sheet more efficiently, and cut costs to meet her goal of boosting returns. Failure to achieve these targets could result in renewed calls for more drastic actions, like dismantling the company. The reorganization, led by Titi Cole and consulting firm Boston Consulting Group, aims to remove unnecessary layers and serve clients better.
The exact number of layoffs will be determined in the coming weeks, but it is clear that executives will see more significant cuts beyond 10%. Regional managers, co-heads, chiefs of staff, and chief administrative officers across Citigroup are at risk. Operations staff supporting businesses that have been divested or reorganized are also at higher risk. Even if Fraser announces a large reduction in workers, investors will likely need to see expenses decrease before they are convinced. Citigroup has emphasized that costs will start to ease in the second half of 2024, and the reorganization aims to align the bank’s structure with its strategy.
