Citigroup is cutting the number of year-end promotions it awards as it seeks to hold costs down amid a long-term restructuring to shrink headcount, The Financial Times reported Tuesday.

Managers have been told that as many as 2,000 Citi employees could get promotions, with pay hikes limited to 15%, in the next month, down from about 8,000 in previous rounds, the FT report said, citing four people familiar with the decisions.

"Promotions are a key part of our talent strategy and while our year-end process is still underway, the notion that we will see a significant decline in promotions across bank or other releveling is false," a Citi spokesperson told Reuters.

Citi CEO Jane Fraser is implementing a sweeping overhaul of the bank to improve its performance, cut costs and simplify its sprawling businesses. As part of the turnaround, Citi aims to shrink its workforce by 20,000 over the next two years.

Fraser said the bank has simplified its structure to increase accountability, increased investments in its data reporting, enhanced stress testing and reduced high-risk processes with bolstered controls.

The company posted a smaller-than-expected drop in profit for the third quarter as debt underwriting propped up investment banking results.