On January 12th, Mark Mason, Chief Financial Officer of Citibank, announced that Citigroup will lay off 20000 employees in the next two years. Previously, the company reported a net loss of $1.8 billion in the fourth quarter of 2023, the worst quarter in 15 years. The bank expects that in the long run, layoffs will save $2.5 billion.
FactSet believes that the bank reported a fourth quarter loss of $1.16 per share, far below the estimated 11 cents per share.
Citigroup stated that the parallel effects of multiple factors have led to the emergence of this result. These factors include $1.7 billion in fees that the bank had to pay due to the regional banking crisis last spring, $880 million in losses for Argentina, and $800 million in restructuring costs related to approximately 7000 layoffs in 2023. These layoffs are part of Citigroup CEO Jane Fraser's efforts over the years to reduce the company's red tape and increase lagging profits. Fraser called the results "very disappointing" on Friday morning, but stated that 2024 will be a "turning point year" for the country's third largest lender.
Manson said in an interview with CNN on Friday morning, "Whenever an industry or company experiences these types of cuts, it's difficult to boost morale." "Nevertheless, I want to point out a fact that we are very clear about the company's strategy and the momentum we expect."
In addition to the company's plan to lay off 20000 employees from its operations, the bank stated that it will lay off 40000 employees from its Mexican retail division through a public offering for the first time, reducing the total number of employees in the subsidiary from 240000 to around 180000. The bank stated that it expects to pay up to $1 billion in severance pay and restructuring costs related to the planned restructuring in the coming years.
It is reported that Citigroup CEO Jane Fraser first announced her comprehensive restructuring work in September last year. At that time, she stated that in order to reorganize the bank leadership, increase accountability, and increase stock prices, it was necessary to streamline employees. "We will bid farewell to some very talented and hardworking colleagues," she wrote at the time.