By Anna Hrushka, Senior Reporter
Citi plans to reduce its headcount by 20,000 in the “medium term,” as the firm continues to carry out a sweeping overhaul aimed at simplifying operations and eliminating overlap to rein in costs, the bank announced on Friday.
The bank said it expects to incur as much as US$1 billion in severance and restructuring costs this year as part of the cuts.
Citi, which reported its fourth quarter earnings on Friday, reported a US$1.8 billion loss as a series of charges and reserves totaling US$3.8 billion hit the bank’s profit.
In a filing released Wednesday, the bank flagged international exposure to Russia and Argentina, the restructuring plan and a special assessment by the Federal Deposit Insurance Corp., aimed at replenishing the agency’s funds following last year’s string of bank failures, as items that would impact the bank’s latest earnings results.
The firm incurred a US$780 million charge in the fourth quarter related to the overhaul, which was initiated by CEO Jane Fraser in September.
The lender also set aside US$1.3 billion related to cross-border and cross-currency exposures in Argentina and political instability in Russia. The bank also recorded a US$1.7 billion charge related to the FDIC’s special assessment.
On Friday, Fraser called the bank’s fourth quarter results “very disappointing,” but expressed optimism for the year ahead.
“Given how far we are down the path of our simplification and divestitures, 2024 will be a turning point as we’ll be able to completely focus on the performances of our five businesses and our transformation,” she said.
Citi, whose performance has lagged behind its peers in recent years, is undergoing its most significant reorganization in more than a decade, scrapping its two-division structure and replacing it with five units whose leaders report directly to Fraser.
The overhaul is expected to be completed by March.
