Citigroup Inc. will reorganize its management structure and shut down some of its businesses as part of the financial institution’s next steps to restructure itself.

Citi previously said it would make the five leaders of its businesses a part of the newly formed executive management team, with Citi CEO Jane Fraser noting that this would result in massive layoffs. 

Since the announcement on Sept. 13, 2023, Citi disclosed in its third-quarter earnings report that it had optimized the top two layers of management — equating to a 15% reduction in functional roles — and eliminated 60 of its management committees to “unlock the value of Citi.”

Citi noted that it aims to remove five management layers from the current 13 layers. 

Shortly after earnings results were released, managers and consultants at Citi reportedly began discussing the scale and costs of job cuts. An estimated 10% of staff would be cut, causing widespread anxiety within the financial institution.

“Morale is super, super low,” a former banker at Citi, whose name was undisclosed for protection, told CNBC.

Former colleagues have said, “‘I don’t know if I’m getting hit or if my manager is getting hit,’” the banker added. “People are bracing for the worst.”

Citi announced on Nov. 20, 2023, that it would begin the next wave of job cuts across its layers of management.

“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,” Citi said in a statement. 

“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,” Citi added.

Bloomberg reported that the company cut more than 300 roles in senior management, which is two layers below the executive management team. This amounted to 10% of job cuts at that level. 

“On one hand you have the staff where there is a lot of anxiety, of course, because they are looking at every division across the world at every level,” Sonali Basak, a financial correspondent for Bloomberg, said in a broadcast.

“But then you also have to think about the investor response to all of this as well, because since [Jane Fraser] announced that she would be taking these actions, you’ve seen Citi’s stock rally another 9%,” she added. “And so investors have really welcomed the move because Citigroup has seen as it’s been very bloated for a very long time.”

Mark Mason, chief financial officer at Citi, later said during a conference in December 2023 that the restructuring would cost $1 billion and has caused the responsibilities of other chief financial officers to fall under him.

But he added that simplifying the organization streamlines the strategy and execution of the bank’s core businesses, allowing for direct connectivity that is “very powerful in us being able to achieve the return targets that we’ve set.”

Citi closed multiple businesses, including its municipal underwriting and market-making activities and its global distressed debt group, affecting around 140 employees toward the end of the year. 

But the municipal business “became somewhat incompatible” with Fraser’s “goal to improve returns at the bank, which has increasingly been missing targets that it set,” Sally Bakewell, a reporter at Bloomberg, said in a broadcast.

“The bank really wants to prove to investors that it can indeed set targets and meet any guidance that it gives,” she added.