Citigroup CEO Jane Fraser has implemented a massive reorganization known internally as “Project Bora Bora,” which is set to include a hefty round of layoffs in the coming months, according to a report.
“We’ll be saying goodbye to some very talented and hard-working colleagues,” Fraser warned in a memo obtained by CNBC.
The impending job cuts have stirred anxiety among Citi’s staffers, one banker who recently left the company and has kept in touch with former colleagues told CNBC.
“Morale is super, super low. They’re [Citi workers are] saying: ‘I don’t know if I’m getting hit, or if my manager is getting hit.’ People are bracing for the worst,” the former Citi employee said.
It wasn’t immediately clear how many employees Fraser plans to chop from Citi’s workforce of 240,000, though the bank has already begun slashing its headcount.
Last month, Citi scrapped its two core operating units — focused on institutional and consumer clients — and reorganized itself into five key business units including trading, banking, services, wealth management and US consumer offerings.
At the same time, the bank axed 60 management committees in a move to cut costs and streamline operations in what’s poised to become its largest restructuring in two decades.
It’s all part of “Project Bora Bora,” which Fraser announced in September to “eliminate unnecessary complexity across the bank,” she wrote in a statement at the time.
Should the impending layoffs see Fraser parting with an additional 10% of her staffers — roughly 24,000 workers — it would be one of the deepest job cuts Wall Street has seen in years, CNBC reported.
At its current staff levels, Citi boasts the second-largest workforce of any American bank, beat only by the far-more-profitable JPMorgan Chase, which has a US workforce of about 294,000.
Citi declined to confirm CNBC’s report on headcount reduction when contacted by The Post on Monday.
It vowed to to provide further insights on “Project Bora Bora” when the company reports fourth-quarter earnings on Jan. 12, 2024.
“As we’ve said previously, we are committed to delivering the full potential of the bank and meeting our commitments to our stakeholders,” a spokesperson for the bank told The Post.
“We’ve acknowledged the actions we’re taking to reorganize the firm involve some difficult, consequential decisions, but they’re the right steps to align our structure to our strategy and deliver the plan we shared at our 2022 Investor Day.”
The bank has yet to divulge how many job cuts are expected with the reorganization, or an estimate of the number or financial impact.
The severance costs are expected to be incurred in the fourth quarter.
Edward Jones analyst James Shanahan told CNBC that Fraser “needs to do something big” to catch up to rivals and please investors.
“The only thing she can do at this point is a really substantial headcount reduction,” Shanahan told the outlet, adding that “there’s a good chance it’ll [layoffs will] be bigger and more painful for Citi employees than they expect.”
Since Fraser took over in 2021, Citi’s stock has increasingly lagged behind its fellow investment banks — including JPMorgan and Goldman Sachs — while Fraser has had the daunting task of improving profits while simultaneously streamlining the bank and fixing regulatory issues.
The 56-year-old Citi boss has set the goal of boosting Citi’s returns to at least 11% within the next few years, and cutting costs with a hefty payroll reduction would certainly help.
Citi reportedly tapped Boston Consulting Group to assist in the reorganization, sources told CNBC.
Internally, Titi Cole, Citi’s head of legacy franchises, was picked by Fraser to head “Project Bora Bora,” insiders told the outlet.
The Post has sought comment from Boston Consulting Group.