Citi, the perennially top- ranked senior manager, has over the last several weeks fired or asked to leave about 20 employees in the public finance department, including nine bankers, in a move to pare down the firm’s labor force.
Market sources say the firm had over the last few weeks let go Omar Daghastani, a banker based in Chicago, while separate sources said Todd Spence, Jeffrey Cepler, and Mark Chiang had also left the firm. At least two bankers based in the West region, including Michael Gomez, are also gone from the firm. Daghastani had joined the firm from UBS Securities LLC last year.
Citi confirmed that there had been recent departures from the bank, but declined to confirm names.
Market sources have been speaking about the job cuts at Citi for a couple weeks, and a number of firms looking to expand their municipal finance departments have been interviewing Citi bankers in recent months. In the end, only one of the bankers dispatched from the bank was a managing director, as the firm chose to trim from the more junior banking ranks.
No bankers working with either the North Texas Tollway Authority or the Orlando-Orange County Expressway Authority were let go, according to executives at those issuers.
In contrast to firms like UBS and Bear, Stearns & Co., Citi’s actions are not the result of the firm’s decision to leave the market, sell itself to a competitor, or otherwise reduce its exposure to U.S. public finance.
Through the first six months of the year, Citi ranked number one among all senior managers, underwriting 277 deals worth $32.98 billion, according to Thomson Reuters. The total is a drop of about $3.29 billion over last year, but issuance across the market is down from last year’s record-setting pace. Citi’s market share declined to 14.6% from 15.9% last year.
Most investment banks undergo an annual process whereby they look to cull through the bottom 5% of their workforce. Across the bank, Citi is in the process of trimming 10% of its 65,000 employees globally in an effort to cut costs. Sources said Citi has about 250 public finance bankers.
Sources both within and outside the bank said it was their understanding that there will not be anymore cuts beyond the 20 or so who have already left the firm.
Despite the relatively small number of cuts, Citi’s actions illustrate the difference in how firms have responded to the current market environment. While some of the largest commercial and investment banks have been forced to cut back in investment banking, more regional firms almost across the board are using the market turmoil to build their public finance departments.
“Large institutions with well developed risk strategies are almost at a disadvantage,” said Matt Fabian, managing director at Municipal Market Advisors. “They are hampered by overly specific risk management strategies and try to shoehorn munis into strategies built for [other asset classes].”
Yvette Shields contributed to this story.