24th February 2024

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Business Industry and Financial

Citi to cut hundreds of investment banking, mortgage, tech jobs: reports

Citi is cutting hundreds of positions, including some in investment banking, mortgage underwriting and technology, Bloomberg and Reuters reported Thursday.

The cuts represent less than 1% of the bank’s headcount, people familiar with the matter told the wire services, adding that Citi did not mandate a trim to the workforce. Rather, the cuts are part of normal business planning.

Citi’s CFO, Mark Mason, said in January the bank is “actively hiring to execute against our strategy,” but it’s also “re-pacing, where that makes sense.”

“We’re constantly combing talent and making sure we’ve got the right people in the right roles, and, where necessary to restructure, we do that as well,” Mason said, according to Bloomberg.

A Citi spokesperson declined to comment Thursday to Bloomberg or Reuters on the latest rumored right-sizing.

It would mark at least the second round of cuts to Citi’s mortgage staff. The bank saw “a small number of staffing reductions” — fewer than 100 — on its mortgage team in September. The bank attributed the cuts to “internal streamlining of functions.”

Mortgage lending has been a frequent target of headcount trims at banks over the past year, as consumer demand has dwindled amid escalating interest rates.

Wells Fargo laid off more than 500 mortgage bankers last month in the latest of several rounds of reductions the bank has initiated since last April. JPMorgan also cut hundreds of mortgage employees in February. USAA, PacWest and Flagstar have also seen notable reductions in home lending so far this year.

Investment banking, too, has come under the headcount microscope. Citi cut roughly 50 trading personnel and dozens of investment-banking employees in November. Thursday’s cuts come after Citi saw a 53% drop in revenue in that segment from last year, with a further dip expected in the first quarter, according to Bloomberg.

Like home lending, investment banking has hardly been immune to staffing reductions across the industry. Morgan Stanley cut 1,600 employees in December. Goldman Sachs embarked on a 3,200-person cull in January.

And even lenders less known for their investment-banking side have made recent trims to that segment: Truist laid off 5% of its investment bankers in late January, and Bank of America is planning roughly 200 cuts, Bloomberg reported last month.

Technology, too, has seen at least one broad cut in banking. Capital One eliminated 1,100 technology roles in January. 

Companywide, Citi’s headcount has increased by 30,000 employees over the past two years, bolstered by an effort to build teams to resolve consent orders the Federal Reserve and Office of the Comptroller of the Currency issued in 2020 to nudge the bank toward updating its technological infrastructure. 

However, Citi CEO Jane Fraser warned in January, “As our investment in transformation and control initiatives mature, we expect to realize efficiency as those programs transition from manually intensive processes to technology-enabled ones.”