Citigroup (C) is significantly reducing its year-end promotions as part of a broader effort to control costs amid an ongoing restructuring process, according to an exclusive Financial Times report. Historically, Citigroup awarded promotions to thousands of employees at the end of the year, but this year, only around 2,000 employees are expected to receive pay raises or title upgrades, down from about 8,000 in previous rounds.
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Promotions Will Be Done with a Capped Pay Raise
The cuts primarily affect “in-seat promotions,” where employees receive pay increases or better titles without a change in role or responsibilities. Unit heads have already started managing expectations, informing employees that promotions this year are mostly reserved for those assuming new roles or additional responsibilities. Even in these cases, pay raises will likely be capped at 15%, though some see this figure as more of a guideline than a cap.
As a result, employee morale has been affected at Citi. In fact, one Citi employee told FT that recent town halls addressed the heightened stress and toxicity within the workplace. However, Citi has denied claims of a significant decline in promotions.
Citi Is Undergoing Restructuring
This decision comes during a restructuring led by CEO Jane Fraser, which has already seen 10,000 positions eliminated in the first half of the year, with an additional 20,000 set for future cuts as part of Citi’s largest reorganization in years. Job cuts have slowed recently, and the bank does not plan further layoffs until at least next year. However, Citi is exploring alternative cost-cutting methods, including “re-levelling,” where employees may be moved to lower job tiers, reducing their pay.
Is Citibank a Good Stock to Buy Now?
Analysts remain cautiously optimistic about Citi stock, with a Moderate Buy consensus rating based on 10 Buys and seven Holds. Over the past year, Citi has increased by more than 60%, and the average C price target of $74.50 implies an upside potential of 6.2% from current levels.
