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Citi to cut 20,000 jobs through 2026, swings to $1.8 billion loss

The group with 239,000 employees worldwide will reduce the number in two years

Published: Fri 12 Jan 2024, 8:28 PM

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  • Reuters

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The Citigroup Inc (Citi) logo. — Reuters file

The Citigroup Inc (Citi) logo. — Reuters file

Citigroup will cut 20,000 jobs over the next two years, the bank said on Friday after reporting a $1.8 billion loss for the fourth quarter.

The lender, which currently has 239,000 employees worldwide, will reduce that number by 20,000 after including layoffs from a sweeping reorganisation, Chief Financial Officer Mark Mason told reporters.


Citi also expects to no longer count 40,000 jobs when it spins off and lists its Mexican consumer unit Banamex in an initial public offering. Given the headcount reduction and separation of Banamex, it aims to reach a staffing level of 180,000 employees, Mason said.

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The bank's shares rose as much as 3.3 per cent in morning trading before paring back gains. They were up 0.3 per cent in mid-morning trading, after CEO Jane Fraser described 2024 as a "turning point year" for the lender. Analysts said excluding the one-off charges, Citi's results showed strength.

"Citigroup's earnings looked awful with a big loss of $1.8 billion, but the bank's underlying business showed resilience," said Octavio Marenzi, CEO at management consultancy firm Opimas.

The loss was driven by $3.8 billion in charges disclosed in a filing on Wednesday that included reorganisation expenses, a reserve build related to currency devaluations and instability in Argentina and Russia and a $1.7 billion payment to replenish deposit insurance fund FDIC.

The bank expects to report between $700 million and $1 billion in charges this year related to severance costs and the reorganization.

"Whenever an industry or company goes through these types of reductions, it’s tough on morale," Mason told reporters. The staffing cuts will not impede revenue growth, he said.

Fraser has rolled out a multi-year effort at the third-largest US lender by assets to cut bureaucracy, increase profits and boost a stock that has lagged peers. Rivals JPMorgan Chase and Bank of America on Friday reported lower quarterly profits, while Wells Fargo outperformed on cost cuts. Citi's revenue fell 3 per cent to $17.4 billion in the quarter from a year earlier. It was the first time the bank broke out earnings for its five businesses -- services, markets, banking, US personal banking and wealth, which were previously housed under broader divisions.

Revenue from markets, or the trading division, dropped 19 per cent to $3.4 billion from a year earlier. It was dragged lower by a 25 per cent plunge in fixed income revenue, which included some losses from Argentina.

In contrast, banking revenue climbed 22 per cent to $949 million, led by higher investment banking fees that offset a slide in corporate lending.

In US personal banking, revenue climbed 12 per cent to $4.9 billion, lifted by retail banking and credit cards.

But consumers have begun to show signs of stress. Citi set aside a bigger reserve to cover losses if clients were unable to pay off their credit cards, mortgages or business loans.



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