Citigroup Restructuring 2025: Can This $45 Stock Rebound After Years of Decline?
In 2025, Citigroup (C) initiates a major restructuring under CEO Jane Fraser, aiming to streamline operations and cut jobs. Will this strategic shift revive shareholder confidence and reverse years of stock underperformance?
Since Jane Fraser became CEO in 2021, Citigroup’s stock has declined over 27%, prompting urgent changes.
In a bold move on Wednesday, Citigroup (C) announced a comprehensive restructuring plan designed to simplify its organizational framework and reduce workforce numbers. This initiative, led by CEO Jane Fraser, seeks to transform the banking giant into a more agile and efficient enterprise, providing much-needed relief to investors.
Highlights of the Restructuring
- CEO Jane Fraser’s restructuring focuses on flattening the organizational hierarchy by having leaders of five core business units report directly to her.
- Citigroup has faced ongoing challenges with profitability and financial performance, with shares falling nearly 30% since Fraser’s leadership began.
- Historically, Citigroup shares plunged nearly 98% during the 2008 financial crisis and remain over 90% below their 2000 peak as of September 2023.
The bank’s recent quarterly profits dropped 36% year-over-year due to rising expenses and credit costs, underscoring the urgency behind the restructuring.
Since February 2021, Citigroup’s shares have lagged considerably, underperforming other major U.S. banks like JPMorgan Chase, Bank of America, and Wells Fargo.
Details of the New Corporate Structure
The restructuring consolidates leadership by having heads of corporate and investment banking, wealth management, transaction services, markets, and U.S. consumer banking report straight to the CEO, reducing management layers and improving decision-making speed.
Following the announcement, Citigroup shares rose approximately 2% on Wednesday, though they remain down about 6% year-to-date.
Will a Streamlined Citigroup Revitalize Its Stock Price?
Citigroup was once a market leader, with its stock nearing $600 in 2000, pioneering innovations like ATMs, credit cards, and wealth management services.
However, setbacks such as the 2002 spin-off of its insurance division, fallout from the 2007-2008 subprime mortgage crisis, and a government bailout led to a dramatic 98% stock value decline between 2007 and 2009. As of September 2023, shares remain over 90% below their all-time highs.
Over the past 25 years, Citigroup has been one of the S&P 500’s worst performers, second only to insurance giant AIG, which also suffered heavily during the financial crisis.
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