Citigroup’s CFO Mark Mason announced on Friday that the company plans to lay off 20,000 employees over the next two years. This decision comes after the banking giant reported a staggering $1.8 billion net loss for the fourth quarter of 2023, marking its worst quarter in 15 years.
The bank aims to save $2.5 billion in the long term through this reduction in headcount. The fourth quarter results were far below expectations, with a loss of $1.16 per share compared to estimates of a loss of 11 cents per share, according to FactSet. Citigroup attributed this substantial loss to several one-time costs, including a $1.7 billion charge related to the regional banking crisis last spring, an $880 million loss in Argentina, and $800 million in restructuring costs associated with approximately 7,000 layoffs in 2023.
These layoffs are part of CEO Jane Fraser’s ongoing efforts to streamline operations and improve profitability at the company. Fraser described the results as “very disappointing” but expressed optimism about 2024, calling it a “turning point year” for the bank.
“While these reductions are necessary to align with our strategic goals, we recognize the impact they have on our employees and their families,” Mason stated during a call with reporters. In addition to the 20,000 job cuts within the company’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 anticipates spending up to $1 billion on severance pay and reorganization costs as part of its restructuring efforts over the next few years. A spokesperson for Citigroup confirmed that the layoffs would be global in scope and declined to provide specific numbers for each region.
CEO Jane Fraser unveiled her comprehensive restructuring plan last September, aiming to reorganize the bank’s leadership, increase accountability, and boost shareholder value. She emphasized the need for a leaner staff to achieve these goals.
(Source: CNN | CNBC | Bloomberg)
