Last July, U.S. bank regulators fined Citi $136 million for making “insufficient progress” fixing data management issues and the IT revamp underscores Citi’s efforts to meet regulatory demands.
Around 100 IT staff in China were informed this week that their contracts will not be renewed, and another 100 are likely to receive their termination notices soon, said the people, who declined to be named due to sensitivity of the matter. The job cuts have not been reported previously.
The staff are employed by Citigroup Services and Technology China, a wholly-owned China unit Citi established in 2002, which has around 3,000 employees in total, according to the sources.
It was not immediately clear how many of those employees are contractors.
The unit supports the bank’s global businesses – including investment and consumer banking – in 20 countries and regions including New York, London and Hong Kong, its website shows. Citi’s head of technology Tim Ryan told staff earlier this year that the bank aimed to reduce the share of external contractors in IT to 20% from the current 50%, according to an internal presentation to employees seen by Reuters. At the same time, the Wall Street bank planned to hire more staff, aiming to raise technology headcount to 50,000 from 48,000 in 2024, the presentation showed.
In China, Citi is offering most of the affected contractors a severance package based on their years of service, the sources said.
“As part of the regular business operations of Citigroup Services and Technology (China) Limited (CSTC), we review our HR strategy on an ongoing basis, including decisions about renewing (fixed term) employment contracts,” said Citi in a statement.
“When decisions are made on non-renewal of fixed term contracts, this will be done in compliance with applicable laws, regulations and procedures. We are committed to supporting impacted employees.”
Besides its IT operations, Citi has banking business in China and is in the process of setting up a securities unit there.
The cutting of IT contractor jobs in China has no impact on Citi’s business strategy and commitment to both local and global clients in that market, said a spokesperson for the bank in Hong Kong.
Other global financial firms have also taken steps to reduce their dependence on China as an IT and service outsourcing destination, as costs rise, and geopolitical uncertainties and new regulations weigh.
Reuters reported in October 2024 that asset manager Fidelity International cut around 500 jobs at one of its technology and operations centres in northeastern Chinese city of Dalian.
