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Citigroup's curious restructuring: "Chairs moved around"

Jane Fraser's plan is progressing. Two months after declaring her preparedness to remove "bystanders" and a few weeks after explaining that this means reducing management layers from 13 to eight and eliminating pointless meetings, last week's changes at Citi brought a bit of clarification about what comes next. However, insiders say it also introduced some new confusion.

After naming Tyler Dickson the sole head of investment banking in September, Citi last week unveiled Dickson's reports along with a raft of other appointments relating to its new geographical cluster structure (Europe, UK, Latin America, Middle East and Africa, Asia South, Asia North and Australia, and Japan) beneath Ernesto Cantu.


In Dickson's team, Jens Welter, whom Citi hired from Credit Suisse in 2022, is becoming the new head of UK and EMEA investment banking. John Chirico is becoming the new, sole, head of North America investment banking. Jan Metzger is  becoming the new head of banking in APAC. 

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However, as it slims down reporting structures and does away with co-heads, Citi isn't actually dismissing any of the former co-heads it doesn't want. It's keeping them on, but in non-managerial roles. In Europe, therefore, Nacho Gutiérrez-Orrantia, the Citi incumbent, with whom Welter was previously co-head, is floating (voluntarily we understand) into a bigger role as head of 'banking' broadly and becoming cluster head for the region. In America, Kevin Cox, who was previously co-head with Chirico, is staying on as chairman of the global industrial group.  There are others too. 

If the restructuring was supposed to cut costs, it therefore doesn't seem to be doing so. Instead, expensive senior people who were doing one sort of job have simply moved into another, likely on the same pay. "This seems to have been a way of reorganizing themselves into a group that vaguely resembles what Jane wants but without anyone actually leaving," says one senior Citi banker outside the top team. "It's just chairs being moved around."

This may not matter. Fraser's reorganization isn't just about upfront cost-cutting, but making the organization more efficient for the future. By slimming down reporting lines but keeping senior people with a wealth of contacts and experience in client-facing chairman roles, some in the bank argue that it has achieved the best of both worlds.

The big question, though, is what happens to Citi's array of co-heads one or two notches further down. Hypothetically, Fraser doesn't like co-heads (even though last week's announcement also included the revelation that James Fleming and Doug Adams will co-head equity capital markets globally). If former co-heads are being kept on at level two, does this mean co-heads will survive at levels three and four too?

Plenty of people inside Citi will be hoping so. Citi has long favored co-head structures, and they're everywhere in the investment bank. Take JP Petard and Greg Dalle in EMEA industrials, Robin Rousseau and Barry Weir, who lead M&A in Europe or the likes of Liz Milonopoulos and Brian Yick, who run internet banking in the US. As Citi managing directors await the next raft of revelations, the hope is that the bank will stay kind and that everyone will stay aboard. This may be difficult. "I'm pretty sure we have three co-heads for some teams," the senior banker reflects.

Ultimately, Fraser may hope that senior people who are relegated to chairman roles leave of their own accords. Laying off top bankers with long tenure can be expensive. Some are going already: as we reported last week Shreyas Bordia, Citi's head of EMEA energy investment banking, quit voluntarily for something new and as yet mysterious before even waiting to find out where he sits in the new structure. 

It's not clear when Citi will disclose the direct reports of Welter, Chirico and Metzger, but the next announcement promises to clarify things. In the meantime, insiders at the bank say there's some confusion about the new reporting lines because all the sector and product group heads in investment banking report directly to Tyler for their respective global franchises, implying that the regional heads' powers might be limited. "In the old world, the geographical entity had all the power. Now, it's the sector teams that have priority," says the banker. 

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AUTHORSarah Butcher Global Editor
  • RS
    11 December 2023

    Looks like more layers. What do clusters mean now that they are more. What example, if you are a VP in UK, should you develop your brand as a UK client specialist or should you find a sector to work in. Sector heads report into global CEO who reports into Jane. What do the cluster heads do then? They don’t even come into the reporting line. Then you have UK and Asia cluster heads reporting into Ernesto. Why don’t Europe cluster heads report into him. It is more confusing than ever! I feel sorry for people who are not in sales as business management functions are just not clear with so many clusters, sectors, product and country heads!!!!

  • ph
    30 November 2023

    Back when Citibank and Wild Wild West company Smith Barney merged, I found myself working at the 'merged' mess. I found different parts of the company seeing themselves as competing with each other, compliance was constantly emphasized (for the regulators to hear) but was a huge, bad joke where bosses dumped people they either wanted out of the way or whom they knew could be ignored. It was a lousy time for women to be in the IB side, among others, because they were typically iced out. Little things like vendor contracts, regulations, laws, etc. tended to be ignored, and potential liability for this hidden. Worse yet, managers who were into this cheating tended to get promotions and more pay. One, who cost the firm a fortune plus piles of HR complaints, was 'disappeared' into a do nothing position with a secretary and expense account.

    Now people have told me that it's SOMEWHAT better today, but I'm also aware of a variety of duplicated 'services' - IOTW, a number of departments doing the exact same work independently of each other. My current impression is that some areas still need a very deep cleaning! Plus, while there I got so sick of the brats, AKA Analytes and Associates in IB who always had their noses way up in the air while they waited in line for badly overpriced coffee instead of actually doing any work. As brats go, these were especially nasty to anyone they saw as below them.

  • M&
    28 November 2023

    Jane had her 3 years of failure and its time to move on from her. Here are the order of events that need to happen in order to course correct at Citi:

    1) Fire CEO - Inability to make any beneficial, impactful change at Citi during her tenure.

    2) Fire Board - Allowed the CEO to continue down the wrong path and delayed the need to cut the fat (should have happened late 2021, early 2022).

    3) Fire more MDs - There are still so many layers of management, in some cases 3 MDs in the same reporting structure, with a ton of people below them doing the work while they collect fat paychecks. Decision making is lacking at the firm due to MD overgrowth.

    4) Refocus on Core Markets - NAM, APAC, EMEA are the only markets that matter. Everything else needs to be tossed ASAP, regardless of impact to the bank. Sell it for pennies on the dollar and move on.

    5) Enhance Technology at the Bank - Citi's mobile app/banking website is a joke and needs a major revamp given the clear inability to bring it to a 21st century standard. Look at Capital One and other fintechs on how to develop easy to use applications for your customers.

    6) HR Revamp - HR and Recruiting is NON-existent at Citi. The firm lacks the resources necessary to identify, hire, train, and retain the right talent and the best contributors continuously leave the firm. Eliminate the existing recruiting base and get people who understand the positions they are hiring for. PAY YOUR EXISTING EMPLOYEE BASE a salary increase based on inflation and DO NOT undercut them (~1% annual increase is the norm). Ensure they are also receiving bonuses in-line with the market (anything less than 10% for a bank is unacceptable). If individuals are at the top of the salary bracket, promote them. Citi continues to do everything in its power to force turnover, resulting in the impossible task of driving a business forward.

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