Dive Brief:
- New York-based Citigroup Inc. plans to cut hundreds of jobs in its trading division, sources told Bloomberg on Monday. The bank will cut jobs across its fixed-income and stock-trading operations over the course of the year, including at least 100 jobs in its equities unit, which would be almost 10% of the division's workforce, according to sources.
- The job cuts come as the bank responds to challenging market conditions, a source told the Financial Times. The bank saw a 4% fall in fixed income trading and a 9% drop in equities revenues year over year, according to the Financial Times.
- Eighty of the reported cuts are expected to take place at the company's London unit.
Dive Insight:
The news of job cuts follows reports that Citigroup will be combining its stock trading business with its prime brokerage unit. A source, however, told the Financial Times the cuts are not related to the bank's reorganization plans.
In an internal memo seen by Reuters, the bank’s co-heads of securities services Carey Lathrop and Andy Morton wrote the bank consolidation plans are aimed at creating an "integrated offering" for clients.
"As the industry continues to consolidate and margin pressures intensify, clients are looking for solutions that deliver best-in-class services," Lathrop and Morton wrote. "We believe that now is the time to create an integrated offering supporting the pre-trade, execution and post-trade requirements of our clients."
Citigroup's reorganization is its second in as many months. The bank combined its Foreign Exchange & Local Markets and G10 currencies businesses into one unit last month, according to Reuters.
Citigroup won’t be the last to announce trading-related jobs cuts, an analyst told Bloomberg.
"The rest of Wall Street is thinking the same way," Jeff Harte, an analyst at Sandler O'Neill, told the publication.
According to Bloomberg, industry leaders have said clients are stepping back amid the escalating trade war and the Federal Reserve's shifting position on interest rates, causing trading revenue for global banks to slump.
