Citigroup is shutting down its municipal business, a move that will affect around 100 employees, as the bank continues to overhaul its business under an reorg by chief executive, Jane Fraser.
The bank has decided that the unit is “no longer viable given our commitment to increase the firm’s overall returns”, according to a memo send to staff reported by Bloomberg. The unit, which underwrites, sells and trades US local debt, was once a market leading business for Citigroup.
However, the bank is making tough choices on which business lines will fit into a new structure unveiled by Fraser in September. The bank has installed new leadership in key divisions and is reviewing hundreds of jobs as it looks to streamline its business into five key units and reduce management layers.
Citigroup was contacted for comment.
The muni business will be wound down by the end of the first quarter and “as a result, most of our municipal sales, trading and banking colleagues will unfortunately be leaving Citi over the next few months,” Bloomberg reported. It will affect around 100 employees.
READ Citigroup has spent $1bn to save costs as Jane Fraser’s overhaul takes shape
The bank has initially cut around 300 senior management jobs as it unveiled the next phase of its overhaul in November, but more reductions are expected in the coming months. Mark Mason, Citi’s chief financial officer, said during a December conference that it was “on track” to complete the overhaul by the end of the first quarter.
In the UK, the bank put 250 jobs at managing director and director level under review in October and flagged further cuts at lower levels through a consultation period started in November for those in lower ranks, without specifying a number.
Mason said that the bank was focused on flattening the structure and eliminating unnecessary management roles across divisions and geographies. “By eliminating those roles those businesses are now sitting at my table… By the way, when I eliminate those roles, the support for those roles goes away as well. That’s how we get the saves, but at the same time, the efficiency that allows us to run the business more effectively,” he said at the conference.
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