Citi reportedly considering August layoffs amid questions about hiring plan

Reports suggest that Citi is considering making cuts in August, specifically targeting senior bankers within its investment banking division. While Goldman Sachs has announced that there will be no job cuts in its investment bank in the upcoming quarter, the situation seems less favorable at Citi.

Sources within the US bank have revealed that the planned cuts are currently in their preliminary stages and are known only by senior figures in the investment banking sector. It is anticipated that the impact will be felt by directors and managing directors across the division. Despite these rumblings, a spokesperson for Citi declined to provide any official comments on the matter.

The proposed cuts are occurring amidst a backdrop of anticipation in the banking industry for a revival of M&A deals and IPOs. A recent statement by Jon Gray, the number two executive at Blackstone, indicated that the dealmaking lull is coming to an end, with the private capital firm boasting its largest forward IPO pipeline in years. At Citi, revenues in the M&A arm surged by 52% compared to the previous year, while equity capital markets revenues saw a 25% increase. However, the bank experienced a nearly 12% decline in debt capital markets revenues in the second quarter of the year.

Since mid-2024, Citi’s investment banking division has been under the leadership of Vis Rahgavan, a former JPMorgan executive. Rahgavan has been actively recruiting former colleagues from JPMorgan to bolster his team and has hinted at further talent investments in the future. This hiring spree has not been met with unanimous approval from within Citi, with some expressing concerns about the choice of new recruits and quick promotions which have led to the departure of longstanding Citi bankers.

Critics of Citi’s investment bank argue that senior staff within the division are lacking motivation and should be replaced. However, feelings towards Rahgavan, the architect behind these changes, are mixed within the organization. While some welcome his initiatives, others question his decisions and opaque management style. There is a sense of unease concerning how the bank is funding these new hires and the perceived lack of transparency regarding future strategies.

As the industry awaits Citi’s next move, it remains to be seen how the proposed cuts will play out and whether they will align with Rahgavan’s vision for the investment banking business. Despite the uncertainties surrounding the impending changes, it is evident that the banking sector is in a state of flux, with firms recalibrating their strategies in response to evolving market conditions.