Citigroup to cut IT contractors, hire staff to fix compliance issues: Reuters
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The news: Citigroup plans to slash its information technology contractors and hire thousands of IT employees as the bank deals with the fallout of high profile data governance and controls breaches, according to a report by Reuters.
The numbers: Citi will reduce contractors from 50% of IT staff to 20%, and plans to add 2,000 IT employees taking the division to a total of 50,000.
The context: Citi has suffered from a number of widely publicised data governance and financial control deficiencies. In July last year, Citi was found to have repeatedly breached the Federal Reserve’s Regulation W, which limits the transactions that banks can make to subsidiaries. Later that month the bank was fined USD136 million($260 million) by regulators for making insufficient progress on longstanding data management problems.
In May last year, the UK’s Financial Conduct Authority fined Citigroup £27.7 million after failures in the firm’s systems and controls led to USD1.4 billion of equities being sold in European markets when they should not have been.
The bank cut its profitability target for 2026 due to rising regulatory expenses.
An internal presentation to employees seen by Reuters referenced a USD22.9 million "recent fraud event" related to the work of external contractors, which had also included legitimate work.
In September last year, Citi warned some employees about fraud and unethical behaviour and said it was considering tighter scrutiny of contractors.
What they said: In a statement to Reuters, a Citi spokesperson said: “In the rare instances that we detect any fraudulent activity, whether internally or by a vendor, we take immediate action to hold those responsible accountable for their actions.”
The source: Reuters
