Citigroup plans to cut 20,000 jobs over the next two years after the struggling bank reported its worst fourth-quarter profit in 15 years on Friday.
CEO Jane Fraser, who announced a sweeping overhaul to consolidate the divisions last November, cut the New York-based bank's global headcount to 180,000. I am aiming to do that.
Citi currently has 239,000 employees worldwide. Chief Financial Officer Mark Mason said: after the bank reported a loss of $1.8 billion in the fourth quarter.
Apart from the 20,000 job cuts, the bank plans to cut another 40,000 jobs next year when it spins off its Mexican consumer unit Banamex and launches an initial public offering.
A Citi representative confirmed to the Post that the company will cut 20,000 jobs “over the medium term.”
The bank is headquartered on Greenwich Street in Tribeca and employs approximately 100,000 people in New York City.
When asked if the cuts would have a disproportionate impact on New York jobs, a representative declined to comment.
The Wall Street company expects to incur costs between $700 million and $1 billion related to the impending severance payments.
Mason said the layoffs were “hard on morale,” adding that the restructuring effort would be completed by the end of the first quarter.
Citi was up less than 1% in midday trading Friday.
The bank's revenue for the fourth quarter was $17.4 billion, down 3% from a year earlier.
Revenue from the markets, or trading, division fell 19% from a year earlier to $3.4 billion.
This figure was pushed down by a 25% decline in bond income, which also included losses from Argentina.
By contrast, Citi's banking revenue rose 22% to $949 million, driven by higher investment banking fees that offset a decline in corporate lending.
In the U.S. Personal Banking segment, retail banking and credit card sales increased 12% to $4.9 billion.
Services revenue increased 6% to $4.5 billion, while wealth management revenue decreased 3% to $1.7 billion.
The bank is also building up larger reserves to cover losses if customers default on credit cards, mortgages and business loans.
“While Citigroup's earnings looked dire with a steep loss of $1.8 billion, the bank's underlying business showed resilience,” said Octavio Marenzi, CEO of management consultancy Opimas. Stated.
This is the first time the bank has released earnings for its five businesses, which have traditionally been part of a broader division: Services, Markets, Banking, U.S. Consumer Banking and Wealth.
Fraser called the fourth-quarter results “very disappointing.”
“Given how far along we are on the path of simplification and divestment, 2024 will be a turning point,” he said.
Fraser's reorganization plan will reduce its management tiers from 13 to eight as part of its biggest overhaul in decades.
He said the aim was to cut bureaucracy and increase profits while boosting the company's stock price, which has lagged behind peers.
Rivals JPMorgan Chase & Co. and Bank of America also reported fourth-quarter results on Friday, but both saw their quarterly profits decline, weighed down by similar FDIC ratings.
But JPMorgan posted a record annual profit of $49.6 billion, the highest in the U.S. banking industry. The company said this was a staggering 31% improvement from its 2022 bottom line, which was better than economists expected.
Bank of America said fourth-quarter revenue fell 56% to $3.14 billion, double the 28% decline expected by analysts.
Wells Fargo, on the other hand, did well as it cut costs.
It reported a 2% increase from the same period last year to $20.48 billion.
with post wire
