Citigroup Dropping 20,000 Jobs: Big Changes Ahead

Tough Times for Citigroup

So, Citigroup got some major restructuring on the horizon – they’re waving goodbye to a whopping 20,000 employees in the next two years. CFO Mark Mason spilled the beans on Friday after the bank took a hit with a massive $1.8 billion net loss in the fourth quarter of 2023. And get this, it’s their worst quarter stumble in 15 years.

Cutting Costs for the Win

Why the big layoff bomb? Well, Citigroup is eyeing a long-term savings jackpot of $2.5 billion by slashing the workforce. They’re hoping this will help patch up the financial bruises from the recent loss.

Earnings in the Dumpster

Citigroup’s fourth-quarter earnings report was a bummer, reporting a loss of $1.16 per share. That’s way off the mark from the predicted loss of 11 cents per share, according to the financial wizards at FactSet. The bank points fingers at a bunch of one-time costs for this mess.

Costly Hurdles: $1.7 Billion, $880 Million, $800 Million

The financial storm had a few ingredients. There’s a hefty $1.7 billion charge tied to the regional banking crisis last spring, an $880 million loss in Argentina, and an extra $800 million in the mix for restructuring costs from about 7,000 layoffs in 2023. Ouch.

CEO Jane Fraser’s Mission: Less Red Tape, More Profits

CEO Jane Fraser’s been on a mission for a while now – trimming the fat and boosting those lagging profits. She admits the recent results are a letdown but promises that 2024 is the year things turn around for the country’s third-largest lender.

Job Cuts: Necessary But Not Fun

The downside? Well, cutting jobs doesn’t exactly boost morale. CFO Mark Mason admitted in a call that it’s tough on the spirits. But hey, he’s quick to highlight the grand plan and the expected momentum. Layoffs are never a party, but Citigroup’s been clear about their strategy, or so they say.

More Cuts in Mexico: 40,000 on the Chopping Block

Hold onto your hats, folks – it’s not just about the 20,000 jobs. Citigroup plans to trim another 40,000 employees from its Mexican retail unit through an IPO. That’s a total headcount drop from 240,000 to around 180,000.

The Bill for Restructuring: A Cool Billion

This isn’t a cheap move. Citigroup expects to cough up around $1 billion in severance pay and reorganization costs as part of the big restructuring plan. It’s a hefty bill, but I guess you gotta spend money to make money, right?

Global Layoffs and Jane Fraser’s Game Plan

These layoffs aren’t just hitting one corner of the globe – it’s a global affair. A Citigroup spokesperson kept it vague, refusing to spill the beans on specific numbers by region. CEO Jane Fraser kicked off this grand restructuring plan last September, promising a leaner, meaner Citigroup focused on leadership reshuffling and a stock price boost.

Market Response: Citigroup Shares Take a Dip

Investors weren’t throwing a party about this news – Citigroup’s shares took a 1.2% nosedive in afternoon trading. Tough times for the bank, but only time will tell if this overhaul pays off.