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Citigroup said it expects to cut at least 20,000 jobs over the next three years as it reported its worst quarter in 15 years.
The cuts, part of a broader restructuring of the bank announced in September and affecting about 10 percent of its workforce, could cost up to $1.8 billion, Citi said Friday. Once completed, they are expected to save the lender up to $2.5 billion per year.
Costs from the restructuring contributed to Citi's fourth-quarter loss of $1.8 billion. The bank booked more than $4 billion in fees and expenses in the final three months of 2023, including $800 million related to restructuring as well as costs related to its continued exposure to Russia and the devaluation of Argentina's Peso.
The majority of the job cuts are still pending. Although Citi has said it expects to complete its restructuring by March this year, the bank said on Friday that the workforce cuts will be a consequence of this and will not be completed at the same time. By the end of December, the lender had only cut 1,000 jobs.
“Our [organisational] The simplification will be completed by the end of the first quarter,” said Chief Financial Officer Mark Mason. “This creates the opportunity to advance workforce reductions.”
Citi expects total headcount could fall to as many as 180,000 by 2025 or 2026, down from a peak of 240,000 at the start of last year. In addition to the jobs eliminated as part of the restructuring process, the bank expects to cut another 40,000 employees through planned exits from its retail banking operations in Mexico and elsewhere.
“While the fourth quarter was very disappointing due to the impact of notable items, we made significant progress in simplifying Citi and executing our strategy in 2023,” Citi Chief Executive Jane Fraser said in a statement forecasting that 2024 would be “a turning point” for the bank.
Citigroup shares were trading 1.5 percent lower late morning in New York.
In addition to $800 million in charges related to the restructuring, the bank's fourth-quarter charges and expenses of $4 billion included $1.7 billion, which it incurred as part of a ” The Federal Deposit Insurance Corporation had to pay a special assessment to offset losses associated with the bankruptcies of regional banks last year
The figure also included hundreds of millions of dollars in losses related to the devaluation of Argentina's currency and more than $500 million in expenses related to the lender's operations in Russia, which it had previously said would just be set.
Even excluding one-time charges and expenses, quarterly profits still fell more than 20 percent from the fourth quarter of 2022 to more than $1.5 billion, although that was better than analysts expected. Quarterly sales fell 3 percent to $17.4 billion. Citi's full-year profit fell 38 percent year-on-year to $9.2 billion.
The bank continued to benefit to some extent from the unexpectedly robust US economy, although less than in previous quarters. Spending on the bank's credit cards helped boost revenue at its retail banking division by 12 percent, while corporate spending helped boost revenue at Citi's treasury services division, which manages cash and processes payments for multinational companies to increase by 6 percent.
The investment banking division also performed well, with fees rising by more than a fifth to nearly $1 billion, the company's best result in more than two years.
However, business loan revenue fell 26 percent as higher interest rates curbed demand for loans. A decline in market volatility at the end of the year also hurt the bank's traders. Revenue from the sale and trading of bonds, commodities and currencies fell by 25 percent.
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