Citigroup, an American multinational financial firm, announced a 10% reduction in staff in an effort to improve the troubled bank's financial performance and stock price.
In a slideshow accompanying its fourth-quarter profits, New York-based Citigroup said Friday, January 12, that it would lay off some 20,000 workers in the "medium term." The exact duration remained unclear, although the bank has used the same phrase in the past to indicate a three- to five-year period.
According to the presentation, Citigroup had around 200,000 employees by the end of 2023. This number does not include the Mexican businesses that are currently being spun off.
In September 2023, Citigroup CEO Jane Fraser launched a massive overhaul of the company. Since the 2008 financial crisis, when Fraser's predecessors failed to rein down spending, the firm has lagged behind its competitors.
In November of that year, it was reported that consultants and managers working on the project, which was internally referred to as "Project Bora Bora," had considered a 10% reduction in staff at many large companies.
Anticipated Layoffs
A source close to the situation told CNBC that the corporation has subsequently implemented many rounds of layoffs, starting with the highest ranks in the ban. The insider added that another round of cutbacks is scheduled for January 22.
American banks, spearheaded by Goldman Sachs and Wells Fargo, have been laying off workers for the better part of last year in an effort to reduce expenses in the face of flat income. Citigroup stood out from the crowd in 2023, keeping its headcount (including its Mexico business) at around 240,000.
In its most recent financial report, Citigroup detailed a $780 million charge for the fourth quarter related to Fraser's restructuring effort. The company also hinted that it would incur an additional $1 billion in severance and other costs in 2024. In the long run, the bank estimates that these changes might save $2.5 billion in expenses.
Citigroup said in a presentation footnote that it may be slightly lower if it decides to employ internal resources instead of outsourcing, which could result in 20,000 job layoffs.
An unnamed source with knowledge of the situation told CNBC that some Citigroup employees are taking advantage of paid time off to hunt for other employment opportunities since the company is expected to lay off thousands of workers in the coming years. "People are looking aggressively. I know senior VPs who are on vacation now, but they're never coming back."
