Tech layoffs: Citigroup to slash IT contractors by 30% amid regulatory overhaul

Citigroup has announced plans to significantly reduce its reliance on IT contractors, cutting their numbers by 30%. This move is part of a broader strategy to strengthen internal technology capabilities and address regulatory concerns over data governance and risk management.
Currently, 50% of Citigroup's IT workforce consists of external contractors. The bank aims to reduce this figure to 20%, replacing contractors with full-time employees. As part of this transition, Citigroup plans to increase its internal IT staff to 50,000 by the end of 2025, up from 48,000 in 2024. The company will also consolidate its IT operations, moving teams from Rutherford, New Jersey, to a new facility in Jersey City.
“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 decision comes in the wake of regulatory penalties and a $136 million fine imposed on Citigroup in 2024 for deficiencies in data governance. Additionally, a recent $22.9 million fraud incident involving external contractors highlighted the risks associated with outsourcing. Citigroup's leadership has emphasized the need to enhance operational safety and soundness by bringing critical technology functions in-house.
While the move may lead to job losses among contractors, Citigroup's investment in internal teams aims to ensure long-term stability and compliance with regulatory standards.