Citi’s municipal division appears to have been spared from initial reorganization efforts at the firm, according to market sources.
Citigroup informed its employees Monday of an upcoming round of job cuts and managerial changes — the next large step in CEO Jane Fraser’s push to create a simpler, flatter company.
Citi did not say how many positions are being eliminated, nor provide the total number of jobs it plans to cut between now and the end of March, when the company expects to complete its reorganization. The company declined to comment on a Bloomberg News report saying that more than 300 senior manager roles, or about 10% of the jobs at that level, had been eliminated.
Citigroup, which employed 240,000 people at the end of last year, reduced its headcount by 7,000 between January and September.
There had been speculation of layoffs in Citi’s municipal division as several high-profile employees had been let go from the firm over the last year.
Then, in early November, Bloomberg News reported that Fraser was considering closing the firm’s muni trading and origination division. The potential exit surprised many municipal market participants and was viewed as a trial balloon sent by top executives to gauge reaction.
A former Citi employee said they spoke with their former colleagues last week, who were unsure then what was happening. One current employee confirmed Monday they were still employed, the former Citi employee said.
There has also been little talk on the Street that any members of the muni team were let go this week, a second source said.
Part of the reason Citi’s muni team may not have seen job cuts is that the firm has gradually been reducing key muni jobs over the last year, including the high-profile head of municipal strategy Vikram Rai in June.
“Over the last couple of years, we’ve seen people leaving Citi,” the former employee said. The firm was already “cutting a lot of positions.”
The second source added a lot of the “heavy lifting” had been done early on.
The former Citi employee noted that it would be difficult to have a presence in the market without sales and trading.
“How do you have a substantial municipal practice if you do not have a robust trading desk?” they said. “I just don’t know.”
Citi declined to comment on whether there have been layoffs, noting that a statement from the bank refers to the current happenings as the “next layer of changes.”
“Today we shared with our colleagues the next layer of changes across many of our businesses and functions as we continue to align Citi’s organizational structure with our new, simplified operating model,” the statement said. “As we’ve acknowledged, the actions we’re taking to reorganize the firm involve some difficult, consequential decisions, but we believe they are the right steps to align our structure with our strategy and ensure we consistently deliver excellence to our clients.”
These layoffs are part of Fraser’s restructuring aimed at returning the company to profitability. The restructuring will cut managerial levels and give Fraser greater control over Citi’s five key business segments.
Citi has dropped in the rankings of the top municipal underwriters in recent years. The firm dropped out of the top five senior managers in the first three quarters of 2023, falling to sixth from third in the same period last year, according to Refinitiv. The firm dropped to fourth place among senior managers last year, down from second place in 2021.
Additionally, when the employee left Citi, they said the bank was already undergoing a lot of changes.
“That’s an overall changing appetite, an overall changing view of what risk is, how much risk Citi wants to take,” they said.