Citigroup CEO expected to make job cuts amid sweeping management changes

Citigroup CEO Jane Fraser announced a major management shakeup that is expected to lead to job cuts at the Wall Street bank.

The heads of the company’s five businesses will now report directly to Fraser, a move that will give her more direct oversight over its businesses as she seeks to simplify the bank’s structure.

They include Shahmir Khaliq, who runs services, Andrew Morton in markets, Peter Babej for investment and corporate banking in an interim basis, Gonzalo Luchetti in US consumer banking, and Andy Sieg in wealth when he joins the company later this month.

“We are making bold decisions to meet our commitments to our shareholders,” Fraser said in a statement.

Job cuts are expected with the reorganization, but the bank did not make an estimate of the number or financial impact.

The severance costs are expected to be incurred in the fourth quarter.

As part of the changes, the company is breaking apart what used to be its largest division, the Institutional Clients Group, and eliminating the leadership role atop that business, which was previously run by Paco Ybarra, who will become a senior adviser to the firm after retiring.

The new model is also eliminating the leadership role at its personal banking and wealth management arms.

International leadership roles outside North America will be consolidated under the new head of international, Ernesto Cantu.

In the statement, Fraser said the changes “eliminate unnecessary complexity across the bank,” and that will contribute to delivering medium-term targets on the bank’s restructuring announced to investors.

Although the bank has announced successful divestitures, the stock price has failed to react.

Citigroup shares are still valued at less than half book value, whereas competitors hover around 1.