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Analysis: Citigroup’s layoffs, ‘sweeping’ restructuring in uncertain economic period unlikely to affect Singapore’s financial sector
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Analysis: Citigroup’s layoffs, ‘sweeping’ restructuring in uncertain economic period unlikely to affect Singapore’s financial sector
Reuters
- Citigroup's chief executive officer announced that it will strip out a layer of management and cut jobs in a “sweeping reorganisation”
- Citibank Singapore did not say if it would be laying off workers, but economists and analysts said that retrenchments are likely
- They added that Citi's decision came as no surprise, given the uncertain macroeconomic environment
- There is also stiff competition from emerging fintech companies, so banks such as Citi may have to streamline their resources to remain competitive
- Even if there are layoffs, it will not affect Singapore’s robust banking and finance sector, the experts said
BY
JUSTIN ONG
Published September 14, 2023
Updated September 15, 2023
SINGAPORE — Citigroup’s plans to reorganise management and cut jobs came as no surprise to analysts and economists, who said that the uncertain macroeconomic environment, along with stiff competition from emerging financial technology companies, have made it necessary for banks such as Citi to streamline their resources to remain competitive.
Even though there is a possibility of layoffs in Citibank Singapore, which is a subsidiary of Citigroup, they said that it would not affect Singapore’s banking and finance sector as a whole because it is still robust despite the weaker global economy.
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The experts were commenting on plans announced by Citigroup’s chief executive officer Jane Fraser on Wednesday (Sept 13) that it would remove a layer of management and cut jobs in a “sweeping reorganisation”.
The bank, which is headquartered in New York City, will also cut regional leadership roles outside North America.
Citibank Singapore did not confirm that it will be laying off employees. It told TODAY: "Singapore, where Citi has operated in for over 120 years, remains an important hub. Singapore will continue to offer Citi’s full breadth and depth of services to our clients including being one of four wealth hubs globally.”
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However, economists and analysts interviewed by TODAY said that retrenchments are likely.
Why did Citi make this move, what could it mean for the banking and finance sector in general, and how will this affect Singapore?
WHY DID CITI MAKE THIS MOVE?
News agency Reuters reported that the reorganisation is part of Ms Fraser's strategy to improve profits and streamline the bank after she took the helm in 2021.
While Citi has sold businesses and is working on fixing regulatory problems, its stock price has lagged behind its peers.
Independent economist Song Seng Wun said it is common that during a period of downturn and economic uncertainty, banks such as Citi do not perform well.
Mr Song, who has more than 30 years of experience, added: “During an upturn, we have seen these large financial institutions hire aggressively, but during a period of downturn, they aggressively lay people off and restructure to save costs.”
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Global economic growth has been tepid of late. The International Monetary Fund said that with the slowdown, global growth would drop from last year’s 3.5 per cent to 3 per cent this year and the next.