Business

Citigroup plans 20,000 job cuts as it reports worst quarter in 15 years

US bank employs 2,500 people at operations in the State

Citi is to cut 20,000 jobs globally over the next three years. Photograoh: Hiroko Masuike/The New York Times

Stephen Gandel
Joshua Franklin
Madison Darbyshire
Fri Jan 12 2024 - 14:13

Citigroup, which employs more than 2,500 people in the Republic, said it expected to cut at least 20,000 jobs over the next three years, as it reported its worst quarter in 15 years.

The cuts, which are part of a sweeping overhaul of the bank announced in September and amount to about 10 per cent of its workforce, could cost as much as $1.8 billion (€1.6 billion), said Citi on Friday. They are expected to save the lender as much as $2.5 billion a year when complete.

Costs from the restructuring helped drag Citi to a $1.8 billion loss in the fourth quarter. The bank took more than $4 billion (€3.6 billion) in charges and expenses in the final three months of 2023, including $800 million (€729 million) tied to the reorganisation, as well as charges linked to its continued exposure to Russia and the devaluation of Argentina’s peso.

Most of the job cuts have yet to take place. Although Citi has said it expects to complete its reorganisation by March this year, the bank said on Friday that the reductions to its workforce would follow on from that rather than being completed simultaneously. The lender had shed just 1,000 roles by the end of December.

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“Our [organisational] simplification will be done by the end of the first quarter,” said chief financial officer Mark Mason. “That’s what will create the opportunity to help drive the headcount reduction.”

Citi said it expected its overall headcount could fall as low as 180,000 by 2025 or 2026, from a high of 240,000 at the start of last year. On top of the jobs cut through the restructuring process, the bank expected to shed another 40,000 workers through planned exits from its consumer banking business in Mexico and elsewhere.

Shares in Citigroup were trading 1.5 per cent lower by late morning in New York.

Separately, JPMorgan Chase reported record profits in 2023 thanks to a windfall from rising interest rates, and predicted that earnings from lending would continue to grow this year even as the Federal Reserve is expected to start cutting rates. The group employs around 1,300 people in the Republic.

The largest US bank reported fourth-quarter net income of $9.3 billion (€8.5 billion), down from $11 billion (€10 billion) a year earlier.

BNY Mellon, another large Irish employer, meanwhile said it has been hit by more than $900 million (€820 million) in investment markdowns, litigation and costs related to a Federal Deposit Insurance Corporation assessment, as the last vapours of last year’s banking crisis continue to drag.

And Bank of America reported that its profits in the final quarter fell nearly 60 per cent from a year ago, dragged down by one-time expenses tied to last year’s regional banking crisis and the bank’s transition away from a discontinued lending index. The bank employs more than 1,000 in the Irish market. – Copyright The Financial Times Limited 2024

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