In a strategic move to navigate financial setbacks, Citigroup revealed plans to lay off 20,000 employees within the upcoming two years, as stated by CFO Mark Mason on Friday. This decision follows the banking giant’s alarming $1.8 billion net loss reported for the fourth quarter of 2023, marking its most challenging quarter in 15 years.
Anticipating long-term financial benefits, Citigroup estimates the workforce reduction will yield savings of approximately $2.5 billion. However, the bank’s reported earnings for the fourth quarter fell significantly below expectations, registering a loss of $1.16 per share, contrasting sharply with the projected loss of 11 cents per share, as per FactSet data.
Several exceptional charges, including a $1.7 billion provision related to the regional banking turmoil last spring, an $880 million deficit in Argentina, and an $800 million restructuring expense linked to approximately 7,000 layoffs in 2023, heavily impacted Citigroup’s financial results.
CEO Jane Fraser’s comprehensive restructuring strategy aims to streamline operations, eliminate inefficiencies, and rejuvenate dwindling profits. Despite acknowledging the disappointing fourth-quarter results, Fraser remains optimistic about 2024, foreseeing it as a pivotal year for the nation’s third-largest banking institution.
Mark Mason emphasized the challenging implications of such extensive layoffs on employee morale during a call with reporters but highlighted Citigroup’s unwavering clarity regarding its strategic direction and growth momentum.
Beyond the 20,000 job reductions across its global operations, Citigroup disclosed intentions to divest 40,000 roles from its Mexican retail segment through an IPO, trimming the company’s workforce from 240,000 to approximately 180,000 employees. The restructuring initiative is projected to incur up to $1 billion in severance and reorganization expenses in the forthcoming years.
While Citigroup’s spokesperson confirmed the global scale of the layoffs, specifics regarding regional breakdowns remained undisclosed. CEO Jane Fraser initially unveiled her transformative restructuring blueprint last September, emphasizing the necessity for a more agile organizational structure to enhance accountability and drive shareholder value.
