Citi launched its most significant reorganization in more than a decade Wednesday, scrapping its two-division structure and replacing it with five units whose leaders report directly to CEO Jane Fraser.
“These changes eliminate unnecessary complexity across the bank, increase accountability for delivering excellent client service and strengthen our ability to benefit from the natural linkages that exist amongst our businesses,” Fraser said in a statement Wednesday.
Gone is the model that split Citi’s business between its Institutional Clients Group and a unit that encompassed personal banking and wealth management. In its place are five prongs:
- banking, a unit that encompasses investment banking, corporate and commercial banking;
- U.S consumer banking;
- wealth management;
- markets; and
- services, which handles treasury and custody work for big clients.
The changes cement a couple of moves that had been rumored for several weeks — namely, that Andy Morton, the bank’s trading division chief, and Shahmir Khaliq, who leads treasury and trade solutions, would join Fraser’s executive management team.
Under the new structure, Khaliq would lead services, Morton would lead markets, and Gonzalo Luchetti — the subject of another rumored personnel move — would stay atop U.S. personal banking.
Andy Sieg, whom Citi hired away from Bank of America’s Merrill Lynch, will lead wealth management when he starts Sept. 27.
Citi is conducting a search for an executive to lead its banking unit. Peter Babej, who heads Citi’s Asia-Pacific operations, will lead the division in the interim, the bank announced Wednesday.
“We need the leaders of our five businesses at my table, fully engaged in how we operate the firm and in the critical decisions we make every day,” Fraser wrote Wednesday in a memo seen by The Wall Street Journal. “We need a structure with fewer layers and clearer, more direct lines of decision making.”
Fraser signaled job cuts, too, in the coming months.
“These are not decisions that have been taken lightly,” she wrote in the memo, according to Bloomberg. “We’ll be saying goodbye to some very talented and hard-working colleagues who have made important contributions to our firm.”
Citi does not have firm targets for how many employees will be affected, people familiar with the matter told Bloomberg. But CFO Mark Mason in June said severance costs were booked for 5,000 job cuts this year across the company. The bank cut 1,600 jobs in the second quarter.
Employees will know by the end of November any changes to their roles, Fraser said in the memo.
The five division heads are expected to streamline the second and third layers of management in changes to be announced in November and January, sources told Reuters.