Citigroup Plans to Cut up to 200 IT Outsourcing Jobs in China
According to Reuters, Citigroup is planning to cut up to 200 information technology (IT) outsourcing positions in China as part of its global restructuring plan to enhance risk management and data governance capabilities through increasing the number of in-house employees.
Last July, US banking regulators fined Citigroup $136 million for “insufficient progress in repairing data management issues.” The restructuring of its IT department is one of Citigroup’s efforts to comply with regulatory requirements.
Sources revealed that about 100 Chinese outsourced IT workers have been informed this week that their contracts will not be renewed, and another approximately 100 are expected to receive layoff notices.
These employees are part of Citigroup’s wholly-owned subsidiary “Citigroup Services and Technology China” (CSTC), established in China in 2002 with a total of around 3,000 employees. It is currently unclear how many of them are outsourced personnel.
According to the official website, CSTC supports Citigroup’s operations in 20 countries and regions worldwide, including investment banking and personal finance departments in New York, London, and Hong Kong.
In a statement, Citigroup said, “As part of CSTC’s daily operations, we continually review human resource strategies, including decisions on whether to renew fixed-term employment contracts. When the decision is made not to renew the contract, it will be processed in accordance with legal regulations. We are committed to supporting affected employees.”
Citigroup plans to recruit more in-house employees globally to take over relevant operations, thereby improving risk management and data governance capabilities.
Internal briefings obtained by Reuters showed that Citigroup’s technology chief Tim Ryan earlier this year informed employees of the plan to reduce the outsourcing ratio of the IT department from the current 50% to 20%, while expanding the technology workforce from 48,000 to 50,000 employees.
With rising costs, escalating geopolitical risks, and the implementation of new regulations, more multinational financial institutions are reducing their dependence on China as an IT and service outsourcing hub.
Last October, Reuters reported that asset management company Fidelity International laid off approximately 500 employees at its technology and operations center in Dalian, northeast China.