Citi to Cut 20,000 Jobs?

Citigroup would cut 20,000 jobs over the next two years, acknowledging the last quarter of 2023 was  marred by one-off charges that resulted in a $1.8 billion loss. The loss was driven by $3.8 billion in charges which included reorganization expenses, a reserve related to currency devaluations and instability in Argentina and Russia and a $1.7 billion payment to replenish a government deposit insurance fund.

The lender will reduce its global workforce of 239,000 by 20,000 - or roughly 8% of staff - through 2026, including layoffs from the sweeping reorganization. Citi will also no longer count 40,000 jobs when it spins off and lists its Mexican consumer unit Banamex in an eventual initial public offering. It is eventually aiming to reach a staffing level of 180,000 employees.

Source: https://en.wikipedia.org

Citi’s original plan was to exit 14 consumer franchises in Asia, Europe, the Middle East, Africa, and Mexico, and the bank has since closed nine of these franchises, including Australia, Malaysia, India, and Taiwan.

It recently announced the closing of the sale of its consumer operations in Indonesia. Singaporean bank UOB, which has purchased four of Citigroup's Asian franchises, said that those acquisitions have added 5,000 people to its ranks.

It is surprising Citi is not doing well in consumer banking. That was its core business in the initial years. After the 2008 debacle and USD45 billion injection by the Fed, Citi has lost its oomph! Imagine if this was a Malaysian bank like the defunct Bank Bumiputra, there would have been a huge outcry. And injections into Bank Bumiputra totalled only RM3-4 billion or less than USD1 billion. So, what was the big deal to merge Bank Bumiputra with Bank of Commerce and now morphed into CIMB Bank? All that was a ruse for some politicians to make extraordinary gains?

References:

Citi to cut 20,000 jobs, posts $1.8 billion loss in “disappointing” quarter, Tatiana Bautzer and Manya Saini, Reuters, 12 January 2024

Citigroup begins layoffs as Wall Street braces for rough end to 2023, David Hollerith, 20 November 2023