Citigroup Inc has begun to make cuts to its trading workforce as it works toward culling about 400 people from the division.
The company has dismissed dozens of employees across its trading division this week, including cash equities and equity derivatives traders, according to people with knowledge of the matter.
Roughly 50 people have been cut at Citigroup’s New York office so far, and about 25 people are out in London, with more expected this year, said the people, who asked not to be identified discussing personnel.
Citigroup is joining banks including Deutsche Bank AG and Societe Generale SA in eliminating hundreds of jobs across their equities and fixed-income trading divisions.
The New York-based bank is planning to dismiss a total of at least 100 people in its equities unit, people familiar with the matter told Bloomberg this week. About 80 jobs will be eliminated in London, they said.
Scott Helfman, a Citigroup spokesman, declined to comment on the dismissals.
The cuts to Citigroup’s equities division mark something of a reversal for the company, which had been investing in the unit as part of a bid to become a powerhouse in the space. In 2016, Citigroup set out to increase its equities market share to attain a ranking of fifth or sixth, up from roughly eighth or ninth. The company said at the time that a higher position could help it add $1 billion in revenue.
That year, the firm tapped Murray Roos and Dan Keegan to oversee equities, and the two soon appointed Tim Gately to lead the US equities unit. But after years of investment, the extra revenue that had been projected never materialized. While Citigroup now ranks sixth in equities trading globally, revenue was only $300 million higher last year than it was in 2015.
Citigroup has been trying to build out its equities business amid an industrywide decline in revenue. Total commissions collected by banks on US equity trades has contracted by more than a third since 2011, according to a report last year by Greenwich Associates.
“The old saying was top three make money, middle three break even, everybody else loses money,” Morgan Stanley Chief Executive Officer James Gorman, whose firm ranks first in equities trading, said in June. “And I would say that’s highly likely to be the case right now.”
This week, Citigroup combined its equities division with its prime, futures and securities services businesses. Roos and Keegan will run the new division along with Okan Pekin, who had been global head of the bank’s prime business. Cedric Pauwels will now lead the revamped equities unit in North America.
Companywide, Citigroup has been intensely focused on cutting costs as it seeks to improve its efficiency ratio, a measure of how much it costs to produce a dollar of revenue. The firm is aiming to trim 175 basis points from the ratio this year after falling short of its target for the metric in 2018.