Citigroup slashes promotions as it seeks to overhaul bank

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Citigroup is slashing the number of year-end promotions it usually awards, as the bank seeks to hold costs down amid a long-term restructuring to shrink headcount and right the plodding bank.

Managers have been told that as many as 2,000 Citi employees could receive a bump to their pay and title in the next month, down from about 8,000 in previous rounds, four people familiar with the decisions said, cautioning that those decisions are not final.

The change relates to “in-seat promotions”, in which the bank awards pay increases and better titles without changing employees’ roles or responsibility.

In the past few weeks, unit heads have held meetings with their team members to manage expectations about promotions, two of the people said. The staffers were told promotions this year were in most cases only available to individuals who are taking on new roles or responsibilities.

Even in these instances, pay raises for promotions are expected to be limited to 15 per cent, although one person familiar with the discussions described that figure as a “guidepost” rather than a cap.

“The morale is pretty low,” said one Citi employee whose team had a town hall in early November. “Recent town halls have directly addressed toxicity and stress even with HR dialled in.”

Citi said it made group-wide promotions and other role changes earlier this year, “and managers have received guidance to take that effort into consideration at year end”.

Citi disputed there would be “a significant decline in promotions across the bank”.

The group last week scheduled a company-wide town hall for December 5 to give an update on the overhaul that chief executive Jane Fraser launched more than a year ago. The meeting will be led by Citi’s chief operating officer, Anand Selva, but will also feature “a candid conversation” on “how talent and culture are key to successfully transforming the firm” by the bank’s head of human resources, Sara Wechter, according to the email invite to employees.

Citi is adopting its more limited promotion plan at a time when job cuts have been slowing. At the end of last year, it promised to eliminate 20,000 positions from its 229,000 bank-wide staff as part of its largest reorganisation in years. Another 40,000 staffers could be shifted off Citi’s payroll with the planned initial public offering of its Mexican retail bank Banamex.

But after cutting 10,000 positions in the first half of the year, headcount was steady in Citi’s most recent quarter. The bank is not planning on doing another large round of lay-offs until next year at the earliest, according to multiple people.

In September, Citi’s chief financial officer Mark Mason cited regulatory scrutiny as one of the things holding back more aggressive job cuts.

Citi was fined an additional $136mn in June for failing to correct risk control and data management issues that go back to at least 2020, when a Citi staffer mistakenly sent $900mn to creditors of cosmetics company Revlon. It paid a fine of $400mn in 2021 for the same issue.

Mason said the bank’s regulators “wanted to ensure that we were allocating enough resources in order to deliver on the plan we had committed to”.

As a result, Citi has been forced to find other ways to cut costs, including a process called “re-levelling”.

Managers have been told to assess staff and decide whether some should be moved to lower tiers, resulting in lower pay, said one person familiar with the matter.

Last week, Citi distributed a spreadsheet to upper managers listing and describing Citi’s standard roles and job level categories, the person said. Each of the 16 job categories has minimum and maximum salary levels. The person said re-levelling could happen as soon as early next year; the bank disputed the re-levelling plans.

Additional reporting by Joshua Franklin in New York