Citigroup Announces Plans to Cut 20,000 Jobs Globally

Citigroup is set to implement a substantial workforce reduction, with CFO Mark Mason revealing plans to lay off 20,000 employees over the next two years. This decision follows the bank’s dismal performance in the fourth quarter of 2023, reporting a net loss of $1.8 billion, marking its worst quarter in 15 years.

The significant reduction in headcount is anticipated to yield long-term savings of $2.5 billion for the bank. Citigroup’s reported loss of $1.16 per share for the fourth quarter was considerably below estimates, which projected a loss of 11 cents per share, as per FactSet.

Several one-time costs were cited as impacting the bank’s results, including a $1.7 billion charge related to the regional banking crisis in the previous spring, an $880 million loss in Argentina, and $800 million in restructuring costs linked to approximately 7,000 layoffs in 2023.

Citi CEO Jane Fraser, who has been spearheading efforts to streamline operations and boost profits, expressed disappointment with the results on a Friday morning call. However, she outlined that 2024 is expected to be a “turning point year” for the bank.

CFO Mark Mason acknowledged the challenges associated with workforce reductions, stating, “Whenever an industry or company goes through these types of reductions, it’s tough on morale.” Despite this, he emphasized the clarity of the firm’s strategy and the anticipated momentum.

In addition to the 20,000 job cuts within the bank’s operations, Citigroup announced plans to shed 40,000 employees from its Mexican retail unit through an IPO, reducing the total headcount from 240,000 to around 180,000.

The bank foresees paying up to $1 billion in severance pay and reorganization costs over the next few years as part of its comprehensive restructuring plan. The layoffs are characterized as a global initiative, with the bank declining to provide a regional breakdown of the numbers.

Citi CEO Jane Fraser initiated the restructuring efforts in September, emphasizing the need for a leaner staff to achieve leadership reorganization, increased accountability, and enhanced share prices. The announcement led to a 1.2% decline in Citi’s shares during afternoon trading.