- Citigroup plans 20,000 job cuts
- Jane Fraser leads reorganization
- Citigroup faces financial challenges
Over the next two years, Citigroup intends to reduce its workforce by 20,000 positions, or approximately 10% of its worldwide workforce, in an effort to streamline operations.
The workforce reductions are an integral component of an extensive reorganization declared by the leader, Jane Fraser, a year ago.
The executive, who assumed leadership in 2021 and was born in the United Kingdom, predicted that 2024 would mark a “turning point” for the company.
Citi has disposed of a portion of its international operations and has since decided to list its Mexican division as a separate company.
The aforementioned restructuring, disclosed the previous year, seeks to reduce the number of operational divisions, streamline regional management overseas, and eliminate bureaucratic layers within the bank.
Ms. Fraser stated that the bank had made progress on its strategy despite a $1.8bn (£1.4bn) loss in the final three months of 2023, the largest quarterly setback the lender has reported in years.
Ms. Fraser predicted that 2024 would be a turning point in the process of simplification and divestments, considering how far along we are in this endeavor.
Citi, which has over 16,000 employees in the United Kingdom, declined to specify the extent of potential job losses or the specific departments that would be most impacted within the country.
But as the plans advance, the extent of the bank will be drastically reduced.
Mark Mason, chief financial officer, projected that the bank would have approximately 180,000 employees by 2025 or 2026, down from 240,000 at the beginning of 2023.
The bank estimated that the reorganization could cost up to $1 billion this year alone, in addition to the $800 million incurred in the previous quarter. The company anticipates saving $2.5 billion over the medium term.
Citi is among the United States’ five major banks.
Investors have exerted pressure on the organization to enhance its performance. Its profitability is inferior to that of its industry counterparts, and in previous years it encountered regulatory complications, such as penalties related to controls on money laundering.
Citi attributed the most recent quarter’s loss to exceptional circumstances, including the devaluation of the Argentine peso and a special levy imposed by the government on U.S. banks to bolster its deposit fund following a series of failures the previous year.
Annual revenue increased by 4% to $78.5 billion in 2022, while profits decreased by 38% to $9.2 billion.
Comparatively, Wells Fargo, a close competitor, experienced an 11% increase in revenue to $82.5 billion and a roughly 40% surge in profits last year.
Revenue at JP Morgan increased by 23% to over $158 billion, while profits increased by approximately 30%.
Citi shares declined 1.4% on Friday.
