^{Photo: The New York Times}

Citigroup Slashes 3,500 Technology Jobs in China as It Reshapes Global Operations

In a bold restructuring move, Citigroup has announced plans to lay off approximately 3,500 technology employees in China by the end of Q3 2025. This sweeping reduction marks another chapter in Citi’s ongoing effort to trim expenses, boost efficiency, and realign its global operations amid mounting economic pressures and declining growth prospects in China.

Major Cuts Target IT Services

The majority of affected roles are concentrated in Citi’s China Solutions Centers in Shanghai and Dalian, specifically within the Information Technology Services Unit. These employees were primarily responsible for software development, application testing, operational maintenance, and support for Citi’s worldwide digital infrastructure.

While the bank confirmed some of these roles will be relocated to other global technology hubs, it has not disclosed the specific locations or how many jobs will be preserved through reassignment.

Global Strategy: 20,000 Jobs on the Chopping Block

These layoffs are part of a much larger initiative Citi unveiled in early 2024 — a 10% reduction in its global workforce, which translates to approximately 20,000 positions worldwide. So far, similar job cuts have taken place in the United States, Indonesia, the Philippines, and Poland, targeting back-office functions and overlapping operations.

China's Role Diminishing in Citi’s Global Blueprint

Despite these deep cuts, Citi maintains that China remains strategically important. Marc Luet, President for Citi Japan, North Asia, and Australia, reiterated the bank’s ongoing commitment to supporting corporate and institutional clients in China and their cross-border banking needs.

However, industry experts suggest the reality may be shifting. Meng Shen, director at Beijing-based Chanson & Co., pointed out that China’s slower economic momentum and tightened financial regulation are forcing foreign banks to rethink their footprint in the region.

“Western banks face rising uncertainty as Beijing increases oversight, while the once-booming banking opportunities in China are now shrinking,” said Shen.

Sector-Wide Cost Pressures

Citigroup is far from alone in this tightening trend. HSBC’s subsidiary Hang Seng Bank recently revealed it is reducing around 1% of its core workforce in a broader campaign led by HSBC Group CFO Georges Elhedery to slash costs by $1.8 billion by 2026.

JPMorgan Chase and Bank of America have also begun trimming underperforming employees. BoA has reportedly cut at least 150 roles from its investment banking division this year, signaling a broader industry trend of realignment and resource optimization.

Global Headwinds: Trade Tensions and Competitive Pressures

Underlying these workforce changes is a larger strategic recalibration driven by escalating U.S.-China trade tensions, Beijing’s strict regulatory environment, and sluggish domestic demand. Citi’s move comes as U.S. companies increasingly shift manufacturing and sourcing out of China.

According to a recent survey by the American Chamber of Commerce in China, a record number of U.S. firms are considering or already relocating operations to alternative markets due to geopolitical uncertainties and rising operational challenges.

The European Union Chamber of Commerce in China echoed similar concerns. Their recent flash survey revealed a significant decline in business confidence, with European firms facing intense pressure from rising local competition and regulatory ambiguity.

Layoffs Across Industries

Citi’s job cuts are just part of a wave of layoffs sweeping across multiple sectors in China:

• L'Oréal is reportedly slashing up to 50% of its travel retail staff in the country due to sluggish consumer demand.
• Mercedes-Benz is planning to eliminate about 2,000 R&D and sales positions, amounting to a 15% staff reduction in its China operations.
  Despite these cuts, the German automaker still intends to increase long-term investment in China, particularly to stay competitive in the electric vehicle space.

A Turning Point in U.S.-China Financial Ties?

Citigroup’s massive headcount reduction could signal a broader shift among Western banks, many of which are reassessing their strategy in China amid a turbulent geopolitical climate and declining profitability.

CEO Jane Fraser has positioned Citi’s transformation as necessary for restoring profitability and catching up to its more nimble Wall Street peers. With more layoffs expected globally and increasing reallocation of resources, the banking giant is clearly betting on a leaner, more agile global presence.

As Citi looks to consolidate operations and shift focus to markets with better margins and regulatory clarity, China’s role in the bank’s future is likely to evolve — from a core tech hub to a more targeted, client-focused market.