Citi to cut 20K jobs after worst fourth-quarter loss in 15 years

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By Dan Sears

Citigroup plans to slash 20,000 jobs over the next two years after the struggling bank reported its worst fourth-quarter earnings in 15 years Friday.

CEO Jane Fraser — who announced a sweeping overhaul last November to consolidate departments – seeks to bring the New York-based bank’s global headcount down to 180,000.

Citi currently has 239,000 employees worldwide, its Chief Financial Officer Mark Mason said after the bank reported a $1.8 billion loss for the fourth quarter.

Aside from the 20,000 job cuts, the bank expects to slash a further 40,000 jobs when it spins off and list its Mexican consumer unit Banamex in an initial public offering next year.

A representative for Citi confirmed the 20,000-staffer reduction “in the medium term” to The Post.

The rep did not break out how many of those cuts will come at its Greenwich Street headquarters in Tribeca.

The Wall Street firm is expecting to incur between $700 million and $1 billion in expenses tied to the impending severance payments.

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Citigroup said that it has plans to slash its workforce by 20,000 by the end of 2026. REUTERS

Job cuts are “tough on morale,” Mason said, adding that the reorganization efforts will be done by the end of the first quarter.

Citi was up less than 1% in midday trading Friday.

The bank’s revenue in the fourth quarter fell 3%, to $17.4 billion, from a year earlier.

Revenue from markets, or the trading division, dropped 19%, to $3.4 billion, from the year-ago period.

The figure was dragged lower by a 25% plunge in fixed income revenue, which included some losses from Argentina.

In contrast, Citi’s banking revenue climbed 22%, to $949 million, led by higher investment banking fees that offset a slide in corporate lending.

In US personal banking, revenue climbed 12%, to $4.9 billion, lifted by retail banking and credit cards.

Services revenue grew 6%, to $4.5 billion, and wealth management revenues fell 3%, to $1.7 billion.

The bank also set aside a bigger reserve to cover losses if its clients are unable to pay off their credit cards, mortgages or business loans.

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“Citigroup’s earnings looked awful with a big loss of $1.8 billion, but the bank’s underlying business showed resilience,” said Octavio Marenzi, CEO at management consultancy firm Opimas.

It was the first time the bank broke out earnings for its five businesses — services, markets, banking, US personal banking and wealth, which were previously housed under broader divisions.

Fraser called the fourth-quarter results “very disappointing.”

“Given how far we are down the path of our simplification and divestitures, 2024 will be a turning point,” she said.

Jane Fraser, who became Citi’s CEO in March 2021, said that the bank had a “very disappointing” fourth quarter after it posted a $1.8 billion loss for the period. AP

Fraser reorganization plan will reduce management layers from 13 to eight as part of its biggest overhaul in decades.

She said the aim is to reduce bureaucracy and increase profits while boosting the company’s stock, which lags its peers.

Rivals JPMorgan Chase and Bank of America also reported fourth-quarter earnings on Friday — and they all saw lower quarterly profits after being weighed down by similar FDIC assessments.

However, JPMorgan posted a record annual profit of $49.6 billion — the highest in American banking — which it attributed to an impressive 31% improvement from its bottom line in 2022, blowing past economists’ expectations.

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JPMorgan also took a hit in the fourth quarter — citing a one-time charge from the FDIC over 2023’s high-profile bank failures — but saw annual profits soar to a record-breaking nearly $50 billion. REUTERS

Bank of America said income fell 56%, to $3.14 billion, in the fourth quarter — double the 28% drop analysts had anticipated.

Wells Fargo, meanwhile, outperformed on cost cuts.

It reported a 2% increase from the same period last year, to $20.48 billion.

With Post wires

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