Citigroup to Cut Up to 200 Tech Contractor Roles in China Amid Global IT Overhaul
May 16, 2025 – Hong Kong
Citigroup Inc. (NYSE:C) is set to eliminate up to 200 information technology (IT) contractor roles in China, according to two sources familiar with the matter, as part of a strategic shift to hire permanent staff globally to enhance risk management and data governance. The layoffs, affecting employees at Citigroup Services and Technology (China) Limited (CSTC), a wholly-owned unit established in 2002 with approximately 3,000 employees, began this week with 100 contractors notified of non-renewed contracts, and another 100 expected to receive termination notices soon. The move, first reported by Reuters on May 16, 2025, follows a $136 million fine from U.S. regulators in July 2024 for Citi’s “insufficient progress” in addressing data management issues, prompting a broader IT restructuring.
Details of the Layoffs
The affected contractors, primarily based in China, were informed that their fixed-term contracts will not be renewed, with Citi offering severance packages based on years of service, the sources said. A Citi spokesperson stated, “As part of the regular business operations of CSTC, we review our HR strategy on an ongoing basis, including decisions about renewing employment contracts,” emphasizing compliance with local laws and support for impacted employees. The layoffs are part of a March 2025 plan, announced by Citi’s head of technology, Tim Ryan, to reduce reliance on external IT contractors from 50% to 20% of its tech workforce, while increasing permanent staff to 50,000 from 48,000 globally.
The decision stems from regulatory pressure to improve internal controls, highlighted by a $22.9 million fraud event involving external contractors, though the exact fraudulent portion was not specified. Citi’s statement noted that such incidents, while rare, prompt swift accountability measures. The layoffs do not affect Citi’s broader banking or securities operations in China, where the bank is establishing a new securities unit, per a Hong Kong spokesperson.
Context: Citi’s Global Restructuring
Citi’s China layoffs align with a sweeping reorganization under CEO Jane Fraser, initiated in September 2023, targeting 20,000 job cuts globally over two years to streamline operations and boost profitability. By January 2025, CFO Mark Mason confirmed $600 million in severance costs for FY2025, with cuts focusing on middle and back-office roles, including 1,500 managerial positions eliminated in 2024. The bank’s IT overhaul, driven by regulatory demands, aims to consolidate tech operations, reduce external suppliers from 144 to 50, and relocate some U.S.-based IT teams to higher-cost locations like Jersey City by 2026.
Previous Asia-Pacific cuts include 20 equity research jobs in January 2024 across Hong Kong, Japan, Australia, and South Korea, and 10 more in March 2024, alongside investment banking reductions. In 2022, Citi announced the wind-down of its China consumer banking business, affecting 1,200 employees, as part of exiting consumer franchises in 14 markets globally. These moves reflect Citi’s shift toward institutional banking and wealth management in Asia, with plans to hire 3,000 staff for its institutional business by 2027.
Implications and Reactions
The China layoffs, representing about 6.7% of CSTC’s workforce, are a small but significant part of Citi’s 239,000 global headcount reduction. Analysts, like Wells Fargo’s Mike Mayo, view the IT restructuring as a step to address long-standing data governance issues, though Citi’s stock fell 0.7% on May 15, 2025, amid broader market declines. Posts on X, such as @CitiCareers, emphasized the bank’s commitment to supporting affected workers, while @ReutersBiz framed the cuts as a regulatory-driven necessity.
For affected contractors, the severance packages offer some relief, but the abrupt non-renewals highlight the precarity of contract work, especially in China’s competitive tech sector. Citi’s pivot to permanent hiring may strengthen internal controls but risks losing specialized talent, as noted by eFinancialCareers in prior coverage of Citi’s Asia cuts. The bank’s ongoing investment in China’s institutional and securities sectors signals long-term commitment, despite the consumer banking exit and tech contractor reductions.
Broader Industry Trends
Citi’s actions reflect broader banking sector trends, with firms like Bank of America cutting Asia investment banking jobs in 2023 due to sluggish China dealmaking. Regulatory scrutiny of data and risk management, intensified by fines and consent orders, is pushing global banks to internalize critical functions like IT. Meanwhile, China’s financial sector faces its own pressures, with a January 2025 report noting 50% pay cuts for top financial regulators’ staff, signaling cost controls amid economic challenges.
As Citi navigates its regulatory and operational hurdles, the China layoffs underscore the delicate balance between cost-cutting, compliance, and growth in a key market. The bank’s ability to execute its IT overhaul while maintaining client trust will shape its trajectory in an increasingly regulated global landscape.
Sources: Reuters, Bloomberg, eFinancialCareers, The Business Times, The Straits Times, posts on X
