Unlock Editor’s Digest for free
FT editor Roula Khalaf has chosen her favorite stories in this weekly newsletter.
Citigroup typically cuts the number of year-end promotions to keep costs down amid layoffs and a long-term restructuring to turn around the troubled bank.
Citi employees have been told that up to 2,000 employees could see pay and title increases next month, up from about 8,000 in previous rounds, according to four people familiar with the decision. The numbers are decreasing, according to four people familiar with the decisions, who cautioned that the decisions were not final.
The changes relate to “promotions within seats,” where banks give employees raises or better titles without changing their roles or responsibilities.
Department leaders have been meeting with team members in recent weeks to address promotion expectations, two people familiar with the matter said. Staff were told that promotions this year would mostly only be given to individuals who took on new roles and responsibilities.
Even in such cases, raises for promotions would be limited to 15%, but a person familiar with the discussions said that figure was a “guidepost” rather than a ceiling.
“Morale is pretty low,” said one City employee who led a team at City Hall in early November. “City halls these days are directly addressing toxins and stress, even by mobilizing human resources departments.”
Citi said it had made promotions and other role changes across the group earlier this year and “managers have been guided to consider these initiatives at the end of the year”.
Citi claimed that “promotions across the bank will be significantly reduced.”
The group last week had scheduled a company-wide town hall for Dec. 5 to provide an update on the overhaul that Chief Executive Jane Fraser launched more than a year ago. The conference, which will be led by Citi’s Chief Operating Officer Anand Selva, will also include a presentation by Sara Wechter, the bank’s head of human resources, on how talent and culture are key to successful corporate transformation. There are also plans to have “candid conversations” about the issue. Invitation email to employees.
Citi is adopting a more restrictive promotion plan as layoffs slow. Late last year, the bank pledged to cut 20,000 positions out of 229,000 employees as part of its biggest reorganization in years. An additional 40,000 employees could be taken off Citi’s payroll following Mexican retail bank Banamex’s planned initial public offering (IPO).
But after cutting 10,000 positions in the first half of this year, Citi’s headcount remained stable in its most recent quarter. The bank does not plan any further large-scale layoffs until next year at the earliest, people familiar with the matter said.
In September, Citi Chief Financial Officer Mark Mason cited regulatory scrutiny as one of the factors preventing the company from making more aggressive job cuts.
In June, Citi said it had failed to fix risk management and data management issues dating back to at least 2020, and that Citi officials mistakenly transferred $900 million to cosmetics company Revlon’s creditors. He was fined $10,000. The company paid a $400 million fine for the same issue in 2021.
Mason said the bank’s regulators “wanted to make sure we allocated sufficient resources to deliver on the plan we committed to.”
As a result, Citi was forced to find other ways to cut costs, including a process called “releveling.”
Recommended
Administrators have been directed to evaluate staff and decide whether to move some to lower levels and lower their pay, according to people familiar with the matter.
Last week, Citi distributed a spreadsheet to senior executives listing and describing Citi’s standard roles and job level categories, the person said. Each of the 16 occupations has a minimum and maximum salary level. The official said re-levelling could occur as early as early next year. The bank objected to the re-leveling plan.
Additional reporting by Joshua Franklin in New York
