Citigroup to Cut 20,000 Jobs in Sweeping Overhaul, Expects $2.5bn Annual Savings

NEW YORK – Citigroup, one of the largest banking institutions in the world, announced plans to cut at least 20,000 jobs over the next three years. This comes as the bank reported its worst quarter in 15 years. The job cuts are part of a major restructuring effort by Citigroup, amounting to around 10 percent of its workforce. The bank estimates that the cuts could result in costs of up to $1.8 billion but expects to save around $2.5 billion annually once the process is complete.

The restructuring costs had a significant impact on Citigroup’s fourth quarter results, leading to a loss of $1.8 billion. In the last three months of 2023, the bank faced more than $4 billion in charges and expenses, including $800 million related to the reorganization. Citigroup also incurred charges due to its exposure to Russia and the devaluation of Argentina’s peso.

Despite the plans for job cuts, most of the reductions have not yet taken place. The bank aims to complete its reorganization by March of this year. Citigroup expects its overall headcount to potentially fall as low as 180,000 by 2025 or 2026, down from 240,000 at the beginning of 2023. Additionally, the bank plans to shed another 40,000 workers by exiting its consumer banking business in Mexico and elsewhere.

Citigroup’s CEO, Jane Fraser, acknowledged the disappointment of the fourth quarter results but emphasized the progress made in simplifying and executing the bank’s strategy. Fraser believes that 2024 will be a turning point for Citigroup.

Shares in Citigroup were down 1.5 percent in late morning trading in New York. Alongside the charges related to the reorganization, the bank’s fourth quarter expenses included a special assessment payment to the Federal Deposit Insurance Corporation and losses associated with the devaluation of the Argentine currency.

Despite challenges, Citigroup saw some positive outcomes. The bank benefited from the resilient U.S. economy, with increased revenue from credit card spending and corporate activities. Its investment banking division also delivered strong performance. However, corporate lending revenue declined due to higher interest rates, and market volatility affected the bank’s traders.

In summary, Citigroup’s recent announcement of job cuts and its worst quarter in 15 years reflect the ongoing challenges faced by the banking giant. The restructuring efforts, although accompanied by significant costs, are expected to result in substantial savings in the long run. Citigroup remains optimistic about the future, citing progress in executing its strategy and anticipating a turning point in 2024.