After a series of errors, regulatory actions, and calls for change, US banking giant Citigroup plans to cut its IT contractors and hire around 2,000 staff internally—a move that could impact its vendors.
According to a report by news agency Reuters, the bank's head of technology, Tim Ryan, informed employees in an internal presentation that Citigroup plans to reduce reliance on IT contractors from 50% to 20% and expand its tech workforce to 50,000 employees, up from 48,000 in 2024, by hiring additional staff. This move aims to improve risk management and operational efficiency.
The bank told the news agency that it aims to grow its "internal technology capabilities to support" improved safety and drive efficiencies.
According to the report, Citigroup plans to reduce its external IT suppliers from 144 to 50, relocating operations to higher-cost locations like New Jersey, New York, and Irving while maintaining low-cost centers in Chennai, Belfast, and Warsaw. Additionally, the bank will consolidate its IT team in Jersey City next year, moving from Rutherford, New Jersey, where other departments will remain.
What IT Contractors Could Be Affected?
While there is no publicly available data on IT vendors employed by Citigroup, the bank has announced contracts with several companies, notably in India. In 2008, TCS acquired Citigroup Global Services Limited (CGSL), Citi's India-based captive business process outsourcing (BPO) arm, for $505 million. This acquisition included a contract for TCS to provide process outsourcing services to Citi and its affiliates, valued at $2.5 billion over 9.5 years. Whether this contract was extended is not yet known.
In 2013, Wipro secured a five-year, $500 million contract from Citigroup to provide application development, maintenance, and infrastructure management services for Citi's global operations. Cognizant Technology Solutions Corp has also provided IT services to Citigroup.
Outlook Business could not independently verify whether these companies would be affected by Citigroup's latest move.
Series of Errors at US Banking Giant
Jane Fraser-led Citigroup has encountered several notable IT-related mishaps in recent years. Most notably, in April 2024, Citigroup mistakenly credited a customer's account with $81 trillion instead of the intended $280. This error went unnoticed by two employees before being identified by a third after 90 minutes. The transaction was subsequently reversed, and no funds left the bank.
In June 2024, US bank regulators fined Citigroup $136 million for making "insufficient progress" in addressing data management issues initially identified in 2020. In October 2024, an internal analysis revealed that many of Citigroup's employees lacked critical skills in compliance risk management.
