Citigroup cuts thousands of staff at China-based tech centres
Citigroup is “streamlining” tech support operations in China as part of a global restructure, with 3,500 roles set to go.
The finance giant said some of the jobs will be moved, with one commentator suggesting it could join other US companies and shift IT and business support roles to India, where it has existing operations.
IT staff at centres in Shanghai and Dalian will go as part of what the bank describes as its “ongoing assessment of its global resource deployment”.
The bank also said it wants to reduce the reliance on service providers and their staff. The group’s heavy investments in technology, including significant automation, also mean it can streamline operations.
Tech innovation success
Marc Luet, president at Citi Japan, North Asia and Australia, said the company’s tech investments are helping it “optimise its global office footprint.”
“Citi has been innovating and investing in new technologies around the world, upgrading our digital systems and continuing to simplify our processes,” he said in a statement. “There is still work to be done. Many of our efforts are already bearing fruit in helping to improve work, people efficiency and optimise the size of our global office footprint.”
The job reductions will begin in the fourth quarter of this year. The US finance giant will then reduce the size of its offices in Chinese centres accordingly.
“This is a continuation of Citigroup’s global office integration. Citigroup has previously carried out similar office space reduction work due to reduced employee numbers in several locations in the US, Indonesia, the Philippines and Poland,” said a statement from the bank.
Large financial services groups use global delivery networks, which tap into deep talent pools at lower costs in countries like India and China, to support the business. This gives them flexibility to shift workloads to different delivery centres.
Indian option
Peter Schumacher, CEO of management consultancy The Value Leadership Group, which specialises in outsourcing, said it is possible that many of the jobs will move to India, where Citigroup has over 30,000 staff.
“Other US firms have moved jobs from China to India, including IBM. Finance firms like Citi, JP Morgan Chase, Morgan Stanley, Wells Fargo, and other US banks have extremely large and strong centres in India,” he added.
He said Citigroup is in the process of increasing the proportion of work being done by in-house teams. “This underscores the confidence they have in their centres. In our strategy sessions with businesses, we have been hearing that India is evolving into a strategic platform for new competitive advantages and a launch path for business innovations. Many executives now place India on a par with China in terms of importance.”
Citigroup’s Luet said the company is still committed to China. “Citi has a 123-year history in China, and China has always been an important part of Citi’s global network and business development,” he said. “We will continue to firmly serve corporate and institutional clients in China, including local companies and subsidiaries of international companies in China, and serve their cross-border banking needs.”
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