Citigroup Inc. (Citi) is set to lay off 3,500 technology employees globally, with the cuts primarily affecting its information technology services division. These roles span software development, testing, operational support, and platform maintenance—critical functions that power Citi’s global banking infrastructure.

The bank confirmed that the layoffs will be implemented over the coming months, forming part of a wider operational restructuring designed to optimise internal processes and align technology support more closely with the bank’s evolving global priorities. Some of the impacted roles will be relocated to the United States and other global locations, though Citi has declined to disclose specific regional breakdowns.

While cost efficiency and streamlining are common themes, the timing and nature of the move have drawn attention to another driving force behind the decision: mounting US-China tensions and the uncertain landscape of global trade.

Though Citi reiterated its commitment to China, the context surrounding the layoffs suggests a broader realignment of its operational presence. Marc Luet, Citi’s President for Japan, North Asia, and Australia, said in a recent statement: “China has always been an important part of Citi’s global network and business development. We will continue to firmly serve corporate and institutional clients in China and serve their cross-border banking needs.”

The reassurance, however, comes at a time of intensifying friction between the United States and China, particularly around tariffs, regulatory scrutiny, and tech sector vulnerabilities. During former President Donald Trump’s first term, sweeping tariffs on Chinese goods disrupted global supply chains and sparked retaliatory measures. These dynamics have only deepened with the return of similar trade policies.

In a notable move that underlines Citi’s strategic pivot, the bank recently hired Robert Lighthizer, the former US Trade Representative under Trump, to advise on tariff-related implications and broader geopolitical risk management. Lighthizer was instrumental in enforcing tariffs on China and reshaping trade deals such as the North American Free Trade Agreement (NAFTA). His inclusion signals that Citi is actively re-evaluating the long-term viability of key operational hubs, especially in Asia.

Citi’s decision aligns with wider sentiment captured in a recent American Chamber of Commerce in China business survey. The report found a record number of US companies were considering relocating sourcing or manufacturing operations out of China, citing persistent uncertainty, rising costs, and political volatility.

The financial sector is not immune to these pressures. While manufacturing has long been at the centre of the US-China decoupling debate, banks and financial service providers are now confronting questions about where to base their tech talent, how to safeguard operations, and how to remain agile amid rapidly evolving regulatory environments.