Citigroup Inc. is trimming its tech workforce in China. It will let go about 3,500 as part of this exercise, which is reportedly aimed at simplifying its processes globally. Citi is endeavouring to increase profits and better position itself to face stiff competition from rivals. It had set itself a target of cutting 20,000 jobs by 2026.
The Bank will be done with the layoffs at its solution centres in Shanghai and Dalian by the fourth quarter. Some roles may be shifted to other centres to lend support to the bank’s network, globally. These layoffs will not impact Citibank (China), which is the local banking subsidiary of Citi. That means the clients in China will continue to be serviced without any disruption.
For some time now Citi has been trying to set up a wholly-owned securities and futures firm in China. The process has been delayed due to issues pertaining to regulations in the US as well as in China.
Earlier this year, in March, the bank had revealed plans to work with just 20 per cent of external contractors instead of the existing 50 per cent. The bank had about 48,000 employees on the rolls in the IT division at the time. It aimed to increase that number to 50,000 as per media reports. At the time it appeared that the bank wished to focus on expanding its internal technology team so that its systems and processes could be safe and foolproof.
It wasn’t surprising because Citigroup had been dealing with increasing regulatory costs and penalties related to lack of controls and weak data governance. The bank had to pay up over $130 million for not attending to data-management problems that had been pointed out way back in 2020.
