Citigroup to cut 20,000 jobs over next two years after disappointing quarter

Citigroup said it would cut 20,000 jobs over the next two years, acknowledging a "clearly disappointing" quarter marred by one off charges that resulted in a $1.8 billion loss. Citigroup will be cutting 20,000 jobs over the next two years after reporting a $1.8 billion loss for the fourth quarter of last year.(Getty Images via AFP) Shares of the bank which is in the middle of a multi year effort to cut bureaucracy, increase profits and boost a stock that has lagged peers are up more than 1%.

Amazon Sale season is here! Splurge and save now! Click here "The fourth quarter was very clearly disappointing," CEO Jane Fraser told analysts. "We know that 2024 is critical." Also read Google lays off hundreds of employees, fires Fitbit co founders amid cost cutting The 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 reporters.

Citi will also no longer count 40,000 jobs when it spins off and lists its Mexican consumer unit Banamex in an eventual initial public offering, eventually aiming to reach a staffing level of 180,000 employees, Mason said. Still, some analysts said results from the third largest U.S. lender by assets appeared strong when the one off charges were excluded.

"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 reorganization 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.

Also read: In 2023, over 2.6 lakh employees laid off globally. Check India's position 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 affect revenue growth, he said. During the week of Jan. 22, the bank will announce more organizational changes, according to a memo to staff seen by Reuters. Efforts to simplify its structure will be largely completed this quarter, saving $1 billion and eliminating about 5,000 mostly managerial roles, Fraser said.

Can they execute? 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% 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, U.S.

personal banking and wealth, which were previously housed under broader divisions. Also read Tech layoffs 2024: Flipkart, Amazon, Paytm, Google cut thousands of jobs; is AI the real villain? Revenue from markets, or the trading division, dropped 19% to $3.4 billion from a year earlier. It was dragged lower by a 25% plunge in fixed income revenue from sluggish rates and currency markets, as well as losses from Argentina.

In contrast, banking revenue climbed 22% to $949 million, led by higher investment banking fees for debt capital markets and advisory work that offset a slide in corporate lending. In U.S. personal banking, revenue climbed 12% to $4.9 billion, lifted by retail banking and credit cards. But consumers have begun to show signs of stress, prompting Citi to set aside more money to cover losses on souring loans.

"The restructuring announced two months ago was a long time coming," said Chris Marinac, director of research at Janney Montgomery Scott. "The question comes down to: Can they execute on this restructuring in terms of really being able to grow the core business? The jury is still out." Unlock a world of Benefits with HT! From insightful newsletters to real time news alerts and a personalized news feed – it's all here, just a click away! Login Now! SHARE THIS ARTICLE ON Share this article Read this news in brief form Share Via Copy Link Jobs Loss Citigroup Inc..