Citi cuts another 2,000 jobs, severance costs at $650 million

CFO Mark Mason shared this during an earnings call, stating that the earlier $450 million charges, disclosed in June, were for around 5,000 job cuts. 

He also highlighted that the recorded charges for the year don’t include the recent reorganisation announced in the last month, which aims to refocus Citigroup on five key businesses.

Citigroup has mentioned that the restructuring will result in additional job cuts, although a specific number hasn’t been given yet, the report said. 

Despite these reductions, the overall staff count across the firm has stayed constant for the last four quarters at 240,000 employees. The bank has recruited technology personnel and other staff to aid in addressing consent orders received from regulators. 

In the third quarter, Citigroup’s expenses increased by 6 percent to $13.5 billion, which was below analysts’ expectations. The bank maintains its full-year expense projection at $54 billion, as indicated in an earnings presentation, it added.

Impact across

In June Bloomberg reported that Citi is also planning to trim 30 investment banking jobs and 20 corporate ones at its London unit to deal with adverse market conditions,. 

The company is aiming to reduce its cost base to deal with current market conditions. The group is also dismantling its global team that provides commentary and analysis on foreign-exchange markets, reported Bloomberg quoting sources.

The recent round of shutting arms and cutting workforce has lead to departures in both London and New York as well as its Latin America corporate bond trading team, according to a Bloomberg’s previous report.

Future plans?

Earlier sources had indicated that as Citigroup starts its reorganisation, support staff in compliance and risk management are among the most likely to lose their jobs, Reuters reported. 

They added that Citi managers are already convening discussions with employees about potential layoffs,; and one-on-one meetings about departures were also starting.

This comes after the announcement for overhaul. The Reuters report added that CEO Jane Fraser, who called the reorganisation — Citi’s biggest in almost two decades — will gain more direct control over its businesses in an effort to boost profits and the stock price.

The bank is still dealing with a 2020 consent order by regulators demanding it fix several “longstanding deficiencies” in its internal controls. “Simplifying the organization will also advance the execution of Citi’s transformation, the firm’s top priority,” the company said in a statement.

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Updated: 14 Oct 2023, 07:05 AM IST