Citigroup to cut 10% of its workforce as part of a corporate overhaul

The New York-based institution revealed the news through a presentation linked to its fourth-quarter earnings, that approximately 20,000 employees will be laid off over the 'medium term' according to CNBC. While the specific duration was not explicitly defined, Citigroup has historically used this term to indicate a three- to five-year timeframe. 

As of the end of 2023, excluding ongoing operations in Mexico, Citigroup employed around 200,000 individuals. The company's CEO previously initiated a comprehensive overhaul of the third-largest US bank by assets in September, aiming to address longstanding challenges in controlling expenses. Citigroup has lagged behind its peers since the 2008 financial crisis and currently holds the lowest valuation among the six largest US banks. 

Following the September announcement, the company has implemented multiple rounds of layoffs, starting with senior management. Moreover, CNBC cited an insider and reported that another round of job cuts is scheduled for January 2024. American banks, such as Wells Fargo and Goldman Sachs, have been reducing staff to manage costs amidst stagnant revenue. Citigroup, however, maintained staffing levels at approximately 240,000 throughout 2023, inclusive of its Mexican operations. 

Citigroup disclosed a USD 780 million charge in the fourth quarter related to a new restructuring project. Additionally, the bank anticipates the possibility of incurring an additional USD 1 billion in severance and other expenses in 2024. These measures are expected to contribute to cost reductions of up to USD 2.5 billion over time, as per the bank's statement. In a notable footnote, Citigroup mentioned that the actual number of job cuts, currently set at 20,000, could be marginally lower if the bank opts to utilise internal resources rather than outsourcing functions.

Other developments from Citigroup

In December 2023, Citigroup announced a delay in its strategy of developing a wholly-owned securities business in China in order to comply with the country’s data laws.

Following this announcement, the overall strategy of launching a securities business in China took a backseat. The main reason is the fact that the financial institution needed more time to comply with the country’s data laws and requirements. The bank revealed its plans to focus on meeting the needs, preferences, and demands of its customers and clients, as staying compliant with the conditions of the market represents an essential step in its development process.