HONG KONG, CHINA – 2024/06/07: Pedestrians walk past the American multinational investment bank, Citibank or Citi, branch in Hong Kong.
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Citigroup said Thursday it plans to cut around 3,500 technology positions in China, in the latest move by a major U.S. bank aimed at streamlining global operations and reduce costs.
The reduction of staff at the China Citi Solution Centers in Shanghai and Dalian is expected to be completed by the start of the fourth quarter this year, Citi said in a statement.
The jobs affected are mostly in the information technology services unit, providing software technology development, testing and maintenance and operational services for Citi’s global business.
The company said some of the roles will be moved to Citi’s technology centers elsewhere, without specifying the numbers of jobs or specific locations.
The layoffs in China come as Citi continues to work through a broader plan announced January last year, to reduce 10% of its workforce, or about 20,000 employees globally. It has moved to streamline operation and downsize office in the U.S., Indonesia, the Philippines and Poland, the statement said.
“China has always been an important part of Citi’s global network and business development. We will continue to firmly serve corporate and institutional clients in China and serve their cross-border banking needs,” Marc Luet, president of Citi Japan North Asia and Australia said in the statement.
Led by CEO Jane Fraser, Citi has undertaken a sweeping reorganization aimed at improving profitability and restoring investor confidence after years of lagging behind major U.S. banking peers.
Citi is not alone in restructuring operations. A slew of major global banks are under fresh pressure to trim costs against the backdrop of deteriorating global economic outlook as U.S. President Donald Trump’s tariff policies spark concerns over declining trade activity.
Foreign banks, including Citi, may continue scaling back business in China as the country’s soft growth prospects have reduced banking business opportunities, said Meng Shen, director at Beijing-based boutique investment bank Chanson & Co.
Beijing’s tightened regulatory oversight for the financial services industry will likely create additional uncertainty for Western banks, Shen said.
Citi’s Luet, however, reaffirmed plans to establish wholly-owned securities and futures companies in China.
Hong Kong-based Hang Seng Bank, a subsidiary of HSBC, reportedly said last month it was restructuring business in a move that would lead to job losses for about 1% of its “core staff.” The job reductions were part of a cost-cutting drive, led by HSBC Group CEO Georges Elhedery, that aims to cut expenses by $1.8 billion by the end of 2026.
Hong Kong and mainland China-focused banks have seen rising bad loans over the last few years due to their relatively high exposure to China’s troubled property sector.
Several Wall Street banks including JPMorgan and Bank of America have also begun the annual process of terminating underperforming employees. Bank of America has reportedly eliminated 150 banker positions in its investment banking unit this year.
Rethink China strategy?
Some multinational businesses are mulling to scale back reliance on the China market, as they navigate the fallout from Beijing’s tensions with Washington, a sluggish domestic demand and intensifying competition from local companies.
A business survey from the American Chamber of Commerce in China showed the share of U.S. companies in China considering to relocate manufacturing or sourcing out of China hit a record high, at the outset of Trump’s second term.
Escalating trade tensions have also dented confidence among European businesses with operation in China, according to a flash survey released Wednesday by the European Union Chamber of Commerce in China, highlighting “especially gloomy” expectations around heightened competition and profitability.
Local media reported last month that L’Oréal was planning to lay off up to half of its travel retail workforce in China as the French cosmetic giant continues to face sluggish sales.
German luxury carmaker Mercedes-Benz also plans to cut up to 15% of its sales and finance staff in China, Reuters reported, in a move that will affect about 2,000 people working in its research and development units.
The German luxury carmaker, however, still plans to spend heavily in China in the coming years to better compete with local electric-vehicle peers that dominate the market.