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Citi to cut 20,000 jobs amid $1.8 billion quarterly loss
By News Desk - Jan 12, 2024, 12:51 PM ET
Last Updated - Jan 12, 2024, 12:51 PM EST
The global lender has 239,000 employees on its rolls worldwide
Citigroup (C) will cut 20, 000 jobs over the next two years, the bank said on Friday after it reported a $1.8 billion loss for the fourth quarter.
The lender with 239,000 employees worldwide will enforce the cut in a sweeping reorganization, Chief Financial Officer Mark Mason told reporters.
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A Reuters report said that Citi also expects to reduce another 40,000 jobs when it spins off and lists its Mexican consumer unit Banamex in an initial public offering (IPO).
The role cuts are expected to reduce the bank’s headcount to 180,000 employees, Mason said.
The bank's shares rose about 3.3% in morning trading before paring back gains. They were up 0.3% in mid-morning trading after CEO Jane Fraser described 2024 as a "turning point year" for the lender.
Reorganization expenses
"Citigroup's earnings looked awful with a big loss of $1.8 billion, but the bank's underlying business showed resilience," Reuters quoted Octavio Marenzi, CEO at management consultancy firm Opimas, as saying.
The loss was attributed to $3.8 billion in charges disclosed in a filing that included reorganization expenses, a reserve build related to currency devaluations and instability in Argentina and Russia and a $1.7 billion payment to replenish deposit insurance fund FDIC, the report said.
The bank expects it will report between $700 million and $1 billion in charges this year related to severance costs and the reorganization.
Rivals JPMorgan Chase (JPM) and Bank of America (BAC) 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 year over year. 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, the Reuters said.
Revenue from markets, or the trading division, fell 19% to $3.4 billion from a year earlier, dragged down by a 25% plunge in fixed income revenue, which included some losses from Argentina.
However, Citigroup’s banking revenue climbed 22% to $949 million, powered by higher investment banking fees that offset a slide in corporate lending.
The company’s U.S. personal banking section showed a rise in revenue of 12% to $4.9 billion, buoyed by retail banking and credit cards.
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