Citigroup To Cut 20,000 Jobs In The Next Two Years Following Disappointing Q4 Performance
Citigroup, an American multinational investment bank, is anticipated to slash a minimum of 20,000 jobs over the next two years following its poorest quarter performance in 14 years.
The bank plans to reduce its global workforce of 239,000 by 20,000, roughly 8 per cent of its staff, by 2026 as part of a comprehensive reorganisation, according to Chief Financial Officer Mark Mason. Additionally, when Citigroup spins off and lists its Mexican consumer unit Banamex in an initial public offering, it will no longer factor in 40,000 jobs. The ultimate goal is to reach a staffing level of 180,000 employees.
Further organisational changes are expected to be announced by the end of January, with CEO Jane Fraser stating that efforts to simplify the bank's structure will be mostly completed in the current quarter, resulting in a USD 1 billion savings and the elimination of around 5,000 predominantly managerial roles.
Citigroup estimates that the job cuts may incur costs of up to USD 1.8 billion but anticipates saving USD 2.5 billion annually by 2026. The bank reported a USD 1.8 billion loss in the fourth quarter of 2023, driven by various charges, including reorganisation expenses, reserves related to currency devaluations and instability in Argentina and Russia. Additionally, a USD 1.7 billion payment was made to replenish a government deposit insurance fund.
CEO Jane Fraser acknowledged the disappointment in the fourth quarter's performance and emphasised the critical nature of 2024. The bank's revenue declined by 3 per cent to USD 17.4 billion in the quarter compared to the previous year. Notably, this marked the first time the bank reported earnings separately for its five businesses: services, markets, banking, US personal banking, and wealth, which were previously consolidated under broader divisions.
CFO Mason assured that the staffing cuts would not adversely affect the bank's revenue growth. Revenue from the trading division fell 19 per cent to USD 3.4 billion, while in US personal banking, revenue increased by 12 per cent to USD 4.9 billion, driven by growth in retail banking and credit cards.
Citigroup anticipates reporting charges between USD 700 million and USD 1 billion this year related to severance costs and the ongoing reorganisation.
