Shares in U.S. bank Citigroup (C) dropped today as it made moves to slash 200 jobs in China to boost its data handling capabilities.
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Improve Risk Management
According to a Reuters report the bank is cutting information technology contractor roles and will look to replace them with its own staff. The aim of the move is to drive an improvement in risk management and data governance.
Last year, U.S. bank regulators fined Citi $136 million after judging that it had failed to make sufficient progress in fixing data management issues.
It is understood that around 100 IT staff have already been told that their contracts will not be renewed, with the remainder likely to receive notice soon. They are employed by Citigroup Services and Technology China, a wholly-owned China unit Citi established in 2002.
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%. Instead, it planned to hire more staff taking its IT head count to 50,000, from 48,000 in 2024.
Citi Remains Committed
“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.
The bank added that the decision would have no impact on its business strategy or commitment to the Asian market.
Other banks have also made moves to reduce their reliance on Chinese outsourcing skills due to rising costs and geopolitical uncertainties.
In October 2024 asset manager Fidelity International cut around 500 jobs at one of its technology and operations centres in China.
Is C a Good Stock to Buy Now?
On TipRanks, C has a Moderate Buy consensus based on 10 Buy and 4 Hold ratings. Its highest price target is $110. C stock’s consensus price target is $88.33 implying an 17% upside.
