Wall St

Citigroup to cut 20,000 employees

Author: Editors Desk Source: CNN:::

January 12, 2024 at 14:11

Citi says it will also shed 40,000 jobs after the spin off of the bank's Mexican retail unit. John Keeble/Getty Images

Shares of Citi were down 1.2% in afternoon trading.

New York CNN — Citigroup will lay off 20,000 employees over the next two years, CFO Mark Mason said Friday. The reduction comes after the company reported a $1.8 billion net loss for the fourth quarter of 2023, its worst quarter in 15 years.

The bank expects the reduction in headcount to save $2.5 billion over the long-term.

The bank reported a huge earnings loss of $1.16 per share for the fourth quarter, far below estimates of a loss of 11 cents per share, according to FactSet.

Citi said there were several one-time costs that impacted its results. These included a $1.7 billion charge the bank had to pay related to the regional banking crisis last spring, an $880 million loss in Argentina and $800 million in restructuring costs associated with about 7000 layoffs in 2023.

These layoffs are part of Citi CEO Jane Fraser’s years-long effort to cut red tape at the company and boost lagging profits. Fraser called the results “very disappointing” on a call Friday morning, but said that 2024 would be a “turning point year” for the country’s third largest lender.

“Whenever an industry or company goes through these types of reductions, it’s tough on morale,” said Manson on a Friday morning call with reporters. “With that said I would I would point to the fact that we’ve been very clear about the strategy of the firm and very clear about the momentum that we expect.”

In addition to the 20,000 job cuts at the company’s operations, the bank said it will shed 40,000 employees from its Mexican retail unit through an IPO, bringing the total headcount for the company to around 180,000 from 240,000.

Over the next few years, the bank said it expects to pay up to $1 billion in severance pay and reorganization costs related to its planned restructuring.

A spokesperson for the US-based lender said the layoffs would be global in scope and declined to break out numbers by region.

Citigroup CEO Jane Fraser first announced her sweeping restructuring efforts last September. Her plans to rearrange the bank’s leadership, increase accountability and boost the share price, she said, would require a leaner staff.

“We’ll be saying goodbye to some very talented and hard-working colleagues,” Fraser wrote at the time.

Shares of Citi were down 1.2% in afternoon trading.

Correction: An earlier version of this story incorrectly identified where the layoffs are taking place. Citi’s layoffs are worldwide.