Citigroup announces mass layoffs

The US banking giant Citigroup has announced plans to cut up to 20,000 jobs after reporting a steep quarterly loss of $1.8 billion for the last three months of 2023 – its worst in 15 years.

The multinational said on Friday that the disappointing result was due to $4 billion of charges and expenses, including $800 million related to restructuring, a retreat from Russia, and the devaluation of Argentina’s peso.

Citigroup announced plans to wind down its business in Russia in August 2022. The assets of its Russian unit at the time amounted to around $10 billion, while the cost of leaving Russia was estimated at $170 million. In December 2022, the lender sold its portfolio of ruble-denominated consumer loans to Russia’s Uralsib bank.

The staff reductions could cost the banking major as much as $1.8 billion, but generate annual savings of $2.5 billion by 2026, when they are due to be completed. Citi expects its overall headcount to decline to as low as 180,000 by 2025 or 2026, from a high of 240,000 at the beginning of 2023.

The $4 billion in fourth-quarter charges and expenses included $1.7 billion the bank had to pay as part of a “special assessment” from the Federal Deposit Insurance Corporation to recoup losses tied to last year’s regional bank failures.

In addition, Citi’s quarterly earnings saw a year-on-year drop of more than 20%, while quarterly revenue declined by 3% to $17.4 billion. The group’s full-year earnings slipped 38% from the previous year, to $9.2 billion.

In the third quarter, Citigroup posted better-than-expected results, as revenue rose 9% to $20.14 billion, while earnings per share grew 2% to $1.63. Analysts had forecast $19.27 billion and $1.22 per share, respectively. The head of Citigroup, Jane Fraser, noted that despite the difficulties, each of the bank’s five divisions had recorded income growth.

In November, the Wall Street giant announced plans to carry out its biggest cuts in two decades, saying it was eliminating more than 300 senior manager roles. The restructuring includes abandoning the firm’s two core operating units and instead focusing on five key businesses – trading, banking, services, wealth management and US consumer offerings.

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