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Citigroup (C) Considering 10% Job Cuts in Key Businesses

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Citigroup Inc.’s (C - Free Report) managers and consultants working on its reorganization plan have discussed job cuts of at least 10% in several major businesses. The news was first reported by CNBC, which cited people with knowledge of the process.

The reorganization, internally known as "Project Bora Bora" per CNBC, will simplify the Wall Street giant’s business and boost its stock price. While the move was expected to result in job cuts, the scale of layoffs and cost savings will be estimated in the current quarter.

The workforce reduction plan will eliminate co-heads, regional managers and other employees with overlapping responsibilities.

Per sources, Citigroup will let chiefs of staff and chief administrative officers across the company go this month. Moreover, operations staff, who aided divisions that have been divested or reorganized, have a high risk of being laid off, per people familiar with the matter.

Particularly, in September, Citigroupannounced an organizational restructuring to simplify and eliminate extra management layers. This will make the decision-making process swifter, drive increased accountability and enhance the focus on clients.

The new model removes management layers in Personal Banking & Wealth Management, and the Institutional Clients Group. The bank also reduces existing regional layers in the Asia Pacific, Europe, Middle East and Africa, and Latin America.

Specifically, the leaders of each of C’s five main businesses — Banking, Markets, Services, Global Wealth Management and U.S. Personal Banking — will report directly to CEO Jane Fraser and be members of the executive management team.

The company also consolidates the leadership of the firm’s international business under Ernesto Torres Cantú, Head of International. Also, the Banking and International segments will share a common management team to facilitate better connectivity for clients.

Over the past six months, shares of Citigroup have declined 9.8% against the industry’s rise of 4.3%.

 

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Currently, Citigroup carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Finance Stocks Worth Considering

A couple of better-ranked stocks from the finance space are UMB Financial (UMBF - Free Report) and Peoples Bancorp (PEBO - Free Report) .

UMBF’s current-year earnings estimates have been revised 3.2% upward over the past 30 days. Its shares have lost 3.6% over the past three months. The company currently carries a Zacks Rank #2 (Buy).

The Zacks Consensus Estimate for PEBO’s current-year earnings has been revised 1.9% downward over the past month. Over the past three months, its share price has increased 3.3%. The company currently carries a Zacks Rank of 2.


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