When Citigroup (NYSE:C) CEO Jane Fraser announced in September that her sweeping corporate overhaul would result in an undisclosed number of layoffs, a jolt of fear ran through many of the bank’s 240,000 souls.
“We’ll be saying goodbye to some very talented and hard-working colleagues,” she warned in a memo.
Employees’ concerns are justified. Managers and consultants working on Fraser’s reorganization — known internally by its code name, “Project Bora Bora” — have discussed job cuts of at least 10% in several major businesses, according to people with knowledge of the process. The talks are early and numbers may shift in coming weeks.
Fraser is under mounting pressure to fix Citigroup, a global bank so difficult to manage that its challenges consumed three predecessors dating back to 2007. Already a laggard in every metric that matters to investors, the bank has fallen further behind rivals since Fraser took over in early 2021. It trades at a price-to-tangible book value ratio of 0.49, less than half the average of U.S. peers and one-third the valuation of top performers including JPMorgan Chase.
“The only thing she can do at this point is a really substantial headcount reduction,” James Shanahan, an Edward Jones analyst, said in an interview. “She needs to do something big, and I think there’s a good chance it’ll be bigger and more painful for Citi employees than they expect.”
C shares inched up three cents to $42.29.
