As part of CEO Jane Fraser's corporate revamp, layoffs at Citigroup are expected to begin shortly. Employees will be notified beginning on Wednesday, November 15, and further layoffs will be disclosed daily until early next week, according to CNBC's sources who are familiar with the matter.
Imminent Layoffs Amid Corporate Reconstruction
The action conforms to the schedule outlined by Fraser in a document dated September 13. In her announcement, she created five new departments whose managers would report directly to her, leading to the departure of many high-ranking officials.
Fraser previously said that the next round of disruption will be communicated and implemented by the end of November, with final adjustments completed by the end of March 2024.
There is a lot of pressure on Fraser to improve Citigroup, which has been trapped in a stock collapse since headcount and costs have risen over the last several years. The current CEO, who assumed her position in March 2021, is at a crossroads since major investors are very skeptical that the bank would be able to meet the performance objectives that she stated last year.
The head of human resources at Citigroup informed employees last month that those who lost their jobs as a result of the layoffs may be entitled to seek new positions and that severance money would be provided to those who qualified.
While the final number of layoffs is still being established, CNBC reported last week that managers and consultants working on the operation known internally as "Project Bora Bora" have proposed firing at least 10% of staff across many sectors.
According to the sources, who requested anonymity as they were discussing personnel concerns, workers have rushed to internal chat platforms with inquiries about the upcoming layoffs.
Link to Discrimination Claim in Lawsuit
Just last week, Citigroup was cited in a complaint that involves an allegation of discrimination.
In a report by the New York Post, the Consumer Financial Protection Bureau (CFPB) claimed that Citigroup engaged in purposeful discrimination against Armenian American credit card users. Applicants were referred to as "bad guys" or associated with organized crime, and the bank stated internally that Armenians were more likely to commit fraud.
According to the CFPB's investigation, Citigroup workers were instructed not to approve applications from customers with surnames ending in "yan" or "ian," the most prevalent suffix for Armenian surnames, or from the city of Glendale, California, where around 15% of the country's Armenian American community resides.
Citigroup will pay $24.5 million in penalties and $1.4 million in remedies to affected consumers as part of the ruling.
Citigroup said that some of its workers took steps to stop a "well-documented Armenian fraud ring operating in certain parts of California."
