Citigroup is cutting 3,500 tech jobs in mainland China to streamline operations and cut costs. The Citigroup China layoffs move, however, purportedly does not affect its pledge to serve the country’s corporate and institutional clients, according to a South China Morning Post report.

The layoffs affect tech support staff in Shanghai and Dalian who serve the Asia-Pacific region, with the cuts set to be completed in the fourth quarter, Citigroup said on Thursday.

Some roles will be cut, others relocated, and office space reduced, Citigroup said, noting that separation packages exceed local industry norms. Its core Shanghai banking unit and Guangzhou service centre remain unaffected.

Marc Luet, Citigroup’s Japan, Asia North and Australia Cluster and Banking Head, said,

“We are committed to our corporate and institutional clients in China and supporting their cross-border banking needs, as well as clients across our international network who do business there.”

The bank serves many top firms, including 70% of Fortune 500 companies operating in China, Luet said.

He added that Citigroup, the third-largest US lender, still plans to set up a fully owned securities and futures unit in China, though progress appears delayed by US-China tensions.

The Citigroup China layoffs surprised staff there, who had expected a hiring freeze and gradual tech support reduction instead, according to two sources familiar with the strategy.

The layoffs are purportedly part of CEO Jane Fraser’s plan to cut 20,000 jobs globally by 2026 to boost profitability. Earlier, it is said that Citigroup also cut staff and gave up office space in the US, Indonesia, the Philippines, and Poland.

Other banks have also downsized in China due to the weak economy and sluggish capital markets. HSBC cut 900 jobs in its Pinnacle unit in February, while Morgan Stanley, UBS, and Bank of America trimmed investment banking staff last year, the report shared.

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