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Citigroup plans to slash 20,000 jobs over next two years due to ‘disappointing’ Q4 results

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Citigroup plans to slash 20,000 jobs over next two years due to ‘disappointing’ Q4 results

US multinational investment bank Citigroup is expected to cut at least 20,000 jobs over the next two years as it reported its worst quarter in 14 years.

The American lender will reduce its global workforce of 239,000 by 20,000 – or roughly 8% of staff – through 2026, including layoffs from the sweeping reorganization, Chief Financial Officer Mark Mason told media.

Additionally, Citi will no longer count 40,000 jobs when it spins off and lists its Mexican consumer unit Banamex in the ultimate initial public offering, eventually aiming to reach a staffing level of 180,000 employees, Mason said.

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During the last week of January, Citi is likely to announce more organisational changes. “Efforts to simplify its structure will be largely completed this quarter, saving $1 billion and eliminating about 5,000 mostly managerial roles,” CEO Jane Fraser said.

The job cuts could cost as much as $1.8 billion, Citigroup said but will save $2.5 billion a year by 2026.

The multinational bank reported a $1.8 billion loss in the fourth quarter of 2023 (October-December), driven by $3.8 billion in charges disclosed in a filing that included reorganisation expenses, a reserve related to currency devaluations and instability in Argentina and Russia and a $1.7 billion payment to replenish a government deposit insurance fund.

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“The fourth quarter was very clearly disappointing,” CEO added, “We know that 2024 is critical”.

Citi’s revenue fell 3% 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.

CFO Mason said that the staffing cuts will not affect the revenue growth of the lender.

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Revenue from markets, or the trading division, dropped 19% to $3.4 billion from a year earlier.

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

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

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Published: 13 Jan 2024, 06:11 AM IST


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