Amid data governance push, Citigroup overhauls IT workforce, reduces contractor reliance by 30%

Citigroup has announced a strategic overhaul of its IT workforce, aiming to reduce its reliance on contractors by 30%. This initiative aligns with the bank's broader goal to enhance internal technology capabilities and address regulatory concerns. 

Currently, half of Citigroup's IT workforce is composed of external contractors, but the bank intends to decrease this proportion to 20% by 2025. To achieve this, Citigroup plans to expand its internal IT staff from 48,000 in 2024 to 50,000 by the end of 2025. This shift signifies the bank's commitment to building a more secure and stable workforce.

The relocation of Citigroup's IT operations from Rutherford, New Jersey, to a new facility in Jersey City is part of this transformation. This move is expected to consolidate operations and improve the efficiency of Citigroup's IT functions. 

"Citi is growing our internal technology capabilities to support our strategy to improve safety and soundness, enable revenue growth and drive efficiencies," the company told Reuters. The strategic adjustments also aim to bolster data security, enhance risk management practices, and ensure adherence to regulatory requirements.

What led to the layoffs?

Citigroup's decision to slash IT contractors is driven by recent regulatory penalties, including a $136 million fine in 2024 due to data governance issues. Additionally, a $22.9 million fraud case involving external contractors highlighted the risks associated with outsourcing. 

These incidents underscored the importance of bringing key technology functions in-house to mitigate potential risks. By strengthening its internal technology team, Citigroup aims to provide long-term stability and ensure compliance with evolving regulations. 

The bank's approach to enhancing its internal workforce is expected to drive revenue growth and improve operational efficiency. "The bank is expanding its internal technology capabilities to bolster security, drive revenue and improve operational efficiency," stated the bank to Reuters. This strategic focus on internal development is seen as a crucial step towards achieving a more resilient operational model. 

While the reduction in contractors may lead to job losses, Citigroup believes that increasing the number of full-time employees will ultimately provide a more robust and compliant technological infrastructure. The move underscores the bank's commitment to operational safety and soundness while aligning with regulatory expectations. 

Citigroup's leadership views this transition as a necessary measure to safeguard the bank's interests and enhance its technological capabilities. By shifting key technology roles to internal teams, Citigroup aims to achieve greater control over its IT functions, reducing the potential vulnerabilities associated with outsourcing.