Home singapore Analysis: Citigroup’s layoffs, ‘sweeping’ restructuring in uncertain economic period unlikely to affect Singapore’s financial sector

Analysis: Citigroup’s layoffs, ‘sweeping’ restructuring in uncertain economic period unlikely to affect Singapore’s financial sector

Analysis: Citigroup’s layoffs, ‘sweeping’ restructuring in uncertain economic period unlikely to affect Singapore’s financial sector
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 environmentThere is also stiff competition from emerging fintech companies, so banks such as Citi may have to streamline their resources to remain competitiveEven 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 Bookmark Bookmark Share WhatsApp Telegram Facebook Twitter Email LinkedIn

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.

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 said: “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.”

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?


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 over 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.”

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.

Growth will be even slower in advanced economies, where growth will fall from 2.7 per cent last year to 1.5 per cent this year and remain subdued at 1.4 per cent next year.

Mr Song said that Ms Fraser, being a relatively new CEO of the multinational bank, will want to look at how the bank can reposition itself against this tougher macroeconomic backdrop. 

“Taking stock of the operating landscape and given the tough environment, how to improve profit is the responsibility and key performance indicator of every CEO,” he added.


These macroeconomic changes have not just affected Citi. On Tuesday, UBS announced that it is set to cut at least 100 jobs in Asia, just three months after it had sealed the takeover of the beleaguered Credit Suisse. 

Professor Lawrence Loh, director of the Centre for Governance and Sustainability at the National University of Singapore (NUS), said it is no surprise that these macroeconomic challenges are affecting financial institutions across the board. 

“Continued economic growth is necessary for the viability of banking,” Prof Loh said, adding that when growth is slow as it is now though, it will lead to bad business for banks. 

“(When there are) fewer economic opportunities, there will be less demand for funds and less disposable income for deposits.” 

Other than the challenging macroeconomic environment, there has also been an increase in competition from fintech firms that are giving traditional banks such as Citi a “run for their money”, Prof Loh said.

These are firms that use new technology to compete with traditional financial methods in the delivery of financial services, such as artificial intelligence, blockchain, cloud computing and big data. 

Examples include robo-advisers, payment apps and investment apps. 

“A lot of innovation now is driven by smaller players, particularly in the fintech space, that will provide novel technology-enabled services, for example, in investment,” Prof Loh said.

“One of the challenges that Citibank faces is the decline in investment banking… no longer do people go for big investment bankers to help with a deal.” This means that fintech firms and alternative players stand to gain in this space.

Commenting on retrenchments, Ms Denise Cheok, an economist with economics research firm Moody’s Analytics, said that the reasons for the laying off workers in the financial sector are different and largely unrelated to those in the tech sector earlier this year. 

The tech firms were hit at the start of the year from a combination of rising interest rates, general economic uncertainty and also over-hiring during the Covid-19 pandemic, but this is not the case with the financial sector. 

The major central banks’ interest rates are unlikely to rise by much more, and the layoffs appear to be “linked more to internal restructuring” and the macroeconomic factors rather than caused by imbalances from the pandemic, she added. 


TODAY had reached out to Citibank Singapore, but the bank did not reveal whether it would be retrenching workers when asked.

Instead, it said on Thursday evening: “The changes to our structure announced today are the next logical step to realise our strategy to be the pre-eminent banking partner for institutions with cross-border needs and a global leader in wealth management.” 

The bank also said that its new organisational model would ensure “strong coordination across our global network with accelerated decision making, increased accountability and the dynamic delivery of Citi’s capabilities to clients”.

Although the analysts said that Citi’s restructuring will likely result in layoffs in Citibank Singapore, it will not deal a heavy blow to the country’s financial industry.

Prof Loh from NUS said that Citibank Singapore’s services centred around consumer banking, which focuses on providing financial services to individual customers, and to institutional markets, which focuses on providing financial services to large institutions such as corporations and government entities.

He added that these are two areas that Citigroup is downsizing — eliminating management layers in what was known as its Institutional Clients Group and for consumer banking, it had been exiting big markets such as the United Kingdom. 

“Singapore would not be spared.” 

However, Mr Song said that the banking sector here and in the region still remain robust, and will not be badly affected whether retrenchments happen or not. 

Indeed, Singapore banks such as OCBC, United Overseas Bank and DBS have recently reported record profit, having benefited from the surge in interest rates. 

Mr Song said that although sentiments around the rest of the world may be gloomy, the Southeast Asian region and Singapore remains a “dynamic” area for growth. 

Singapore and the region look to expand, and despite a challenging macro backdrop, there are new opportunities such as investments around the region growing, he added.

“And that has been reflected in Singapore, with companies expanding and setting up headquarters in Singapore.”

Even if there are retrenchments from Citibank, the financial sector as a whole will still be strong and there will be opportunities in other firms, Mr Song added.

“There are many financial institutions here, so there are still opportunities in Singapore itself for people to still move around (job roles).”