Citigroup Announces Major Job Cuts and Restructuring as JPMorgan Chase Celebrates Record Profit

Citigroup, a major American banking group, has announced plans to cut 20,000 jobs by the end of 2026 as part of a comprehensive restructuring. Despite this, Citigroup CEO Jane Fraser sees 2024 as a “turning point” for the bank. Chief Financial Officer Mark Mason, while acknowledging that job cuts can have a negative impact on morale, stated the reductions are necessary as part of the bank’s reorganization efforts. Currently employing 239,000 staff globally, Citigroup aims to reduce its workforce to around 180,000 employees. The upcoming listing of Banamex, Citi’s Mexican consumer division, is expected to further reduce staffing levels by about 40,000.

Citigroup’s announcement comes as part of the quarterly earnings season on Wall Street, during which the bank reported a staggering $1.8 billion loss in the last quarter of 2023. This loss was attributed to a series of one-off charges and expenses, amounting to a total of $3.8 billion, related to the bank’s restructuring, retreat from Russia, and exposure to Argentina. Despite this disappointing result, CEO Jane Fraser highlighted the progress made in simplifying the organization and executing its strategy throughout the year.

Shares in Citigroup, the third largest bank in the U.S. with a market valuation of $100 billion, were slightly up during early trading in New York. The bank aims to increase its profitability, reduce bureaucracy, and boost its stock price. At the same time, JPMorgan Chase, America’s third largest bank, reported its best-ever annual profit despite a charge in the last quarter. Although JPMorgan’s fourth-quarter profits dropped 15% to $9.31 billion, its earnings grew by 32% to $49.6 billion over the year. The bank cited higher interest rates and the acquisition of First Republic, a regional bank that failed in the previous year, as contributing factors.

JPMorgan’s chairman and CEO, Jamie Dimon, expressed optimism about the U.S. economy, highlighting consumer spending and expectations of inflation moderation, while cautioning about potential downside risks. Shares in JPMorgan rose as a result of the positive outlook.

Overall, Citigroup’s decision to cut jobs reflects its ongoing efforts to streamline operations and increase efficiency. The bank’s substantial loss in the fourth quarter, coupled with JPMorgan’s solid performance, paints a complex picture of the banking sector. These contrasting outcomes demonstrate the challenges and opportunities faced by banks in an ever-changing economic landscape.