Tech innovation success

Marc Luet, president at Citi Japan, North Asia and Australia, said the company’s tech investments are helping it “optimise its global office footprint.”

“Citi has been innovating and investing in new technologies around the world, upgrading our digital systems and continuing to simplify our processes,” he said in a statement. “There is still work to be done. Many of our efforts are already bearing fruit in helping to improve work, people efficiency and optimise the size of our global office footprint.”

The job reductions will begin in the fourth quarter of this year. The US finance giant will then reduce the size of its offices in Chinese centres accordingly.

“This is a continuation of Citigroup’s global office integration. Citigroup has previously carried out similar office space reduction work due to reduced employee numbers in several locations in the US, Indonesia, the Philippines and Poland,” said a statement from the bank.

Large financial services groups use global delivery networks, which tap into deep talent pools at lower costs in countries like India and China, to support the business. This gives them flexibility to shift workloads to different delivery centres.

Indian option

Peter Schumacher, CEO of management consultancy The Value Leadership Group, which specialises in outsourcing, said it is possible that many of the jobs will move to India, where Citigroup has over 30,000 staff.

“Other US firms have moved jobs from China to India, including IBM. Finance firms like Citi, JP Morgan Chase, Morgan Stanley, Wells Fargo, and other US banks have extremely large and strong centres in India,” he added.

He said Citigroup is in the process of increasing the proportion of work being done by in-house teams. “This underscores the confidence they have in their centres. In our strategy sessions with businesses, we have been hearing that India is evolving into a strategic platform for new competitive advantages and a launch path for business innovations. Many executives now place India on a par with China in terms of importance.”

Citigroup’s Luet said the company is still committed to China. “Citi has a 123-year history in China, and China has always been an important part of Citi’s global network and business development,” he said. “We will continue to firmly serve corporate and institutional clients in China, including local companies and subsidiaries of international companies in China, and serve their cross-border banking needs.”