Citigroup Cuts 20,000 Jobs After Its Wrost Quarter In 14 Years

(CTN News) – Citigroup said it would cut 20,000 jobs, or about 10 percent of its workforce, after reporting its most disappointing quarter ever.

According to Citigroup on Friday, the cuts could cost $1.8 billion, but save $2.5 billion a year.

While the bank incurred $4 billion in charges and expenses, including $800 million tied to restructuring and other big hits from Russia and Argentina’s peso devaluation, it lost $1.8 billion.

Despite a disappointing performance, Fraser said the bank had made “substantial progress simplifying Citi and executing our strategy” and that 2024 would be “a turning point.”

Citigroup’s shares rose 1.7% in afternoon trading. During the financial crisis, Citi’s quarterly results were the worst since 2009.In 2017, it lost $18bn from a non-cash charge related to Donald Trump’s sweeping tax cuts that affected deferred tax assets.

Fraser is restructuring to boost profits, which have lagged behind competitors. Rather than focusing on its location, we’re reorienting the bank based on its lines of business.

In the reorganization, Citigroup will have eight layers of management instead of 13, with Fraser reporting directly to the heads of its five business units. Although Citi says it’ll finish reorganizing by March this year, it says that reducing its workforce will follow after that rather than at the same time.

Only 1,000 jobs had been cut by December. Mark Mason, chief financial officer, said: “Our [organizational] simplification will be done by the end of the first quarter.”

Citigroup said its overall headcount could fall as low as 180,000 by 2025 or 2026, from a high of 240,000 at the start of last year.

40,000 jobs will be cut through exits from the bank’s consumer banking business in Mexico and elsewhere, on top of the restructuring process.

In addition to its $4bn in fourth-quarter charges and expenses, the bank had to pay $1.7bn in “special assessments” to recoup losses from last year’s regional bank failures.

Despite excluding one-off charges and expenses, quarterly earnings still fell more than 20% from the fourth quarter of 2022.Revenues dropped 3 per cent to $17.4 billion. The bank’s full-year earnings fell 38 percent to $9.2 billion.

US economic resilience provided some benefit to the bank. Credit card spending contributed 12 percent to Citigroup’s consumer banking revenue, while corporate spending contributed 6 percent to its Treasury services division.

In the investment banking division, fees increased by nearly a fifth to almost $1bn, its best result in two years. Interest rates rose, resulting in a 26 percent drop in corporate lending revenues.

Also, the end-of-year drop in market volatility hurt the bank’s traders. The sale and trading of bonds, commodities, and currencies declined by 25 percent.

SEE ALSO:

Bitcoin Losses Accelerate With ETF Launch, While Ether Gains 18%