Citigroup is offering laid-off bankers in the UK redundancy packages stretching to a year’s salary, as the US bank prepares to make deep cuts to its business.
The US bank is offering relatively generous severance deals to bankers losing their jobs as a result of the restructure, according to people familiar with the matter.
Citigroup is aiming to strip out 20,000 roles over the next two years, it said during its full-year results. Around 5,000 of these are said to be directly related to a reorganisation unveiled by chief executive Jane Fraser in September.
Bankers told Financial News that the bank is offering three months of gardening leave, a month’s salary for every year served at the bank — capped at 12 months — in redundancy pay, and any remaining holiday will also be paid out. The bank is also offering partial bonuses to laid-off employees who were informed of job cuts before the end of 2023.
The information is based on conversations with investment bankers, who declined to be named, and may differ in other divisions. A spokesperson for Citigroup declined to comment on redundancy packages.
In October, Citigroup started a consultation process for around 250 UK roles in the first wave of potential cuts under the strategy overhaul. It followed this up with another round in late-November, without specifying how many positions were under review.
READ Citi shakes up senior ranks of investment bank as overhaul continues
Statutory redundancy payments in the UK are one week’s pay per year of service for employees between the ages of 22 and 41, and one and a half weeks’ salary for each year for older workers. Banks are typically more generous, generally offering between two and three weeks’ pay for each year an employee has been with the company, as well as paying out gardening leave, which can be three to six months.
When UBS kicked off deep job cuts in the wake of its acquisition of Credit Suisse last year, it offered four weeks’ redundancy pay for every year worked for UK staff, but capped payouts at £250,000.
In New York, laid off Citigroup staff informed of redundancies in January will be paid through to April, Reuters reported previously.
Citigroup is in the midst of an overhaul that Fraser has described as its most significant for two decades. It is stripping out layers of management, reorganising its international business into new geographies, and making reporting lines to senior management more direct.
In its investment bank, despite two senior layers of management being announced, there is so far little evidence of many dealmakers departing. In Europe, Simon Francis, who led its debt financing business in the region, is its most significant exit.
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