Citigroup will lay off 20 thousand employees

(CNN) — Citigroup will lay off 20,000 employees over the next two years, Chief Financial Officer Mark Mason said Friday. The cuts come after the company reported a net loss of $1.8 billion in the fourth quarter of 2023, its worst quarter in 15 years.

The bank expects the workforce reductions to save $2.5 billion over the long term.

The bank reported a huge drop in earnings of $1.16 per share in the fourth quarter, well below estimates of a loss of 11 cents per share, according to FactSet.

Citi said it had several one-time costs that impacted results. They include $1.7 billion in charges related to last spring’s regional banking crisis, an $880 million loss in Argentina and about $800 million in restructuring costs related to about 7,000 layoffs in 2023.

The layoffs are part of Citi CEO Jane Fraser’s long-standing efforts to cut the company’s bureaucracy and boost lagging earnings. Fraser called the results “very disappointing” in a call Friday morning but said 2024 would be a “defining year” for the third-largest U.S. lender.

“Any time an industry or a company goes through cuts like this, it’s hard on morale,” Manson said on a call with reporters Friday. “However, I would like to highlight the fact that we have been very clear about the company’s strategy and very clear about the expected momentum.”

In addition to the 20,000 jobs that will be cut across the company’s operations, the bank said it will lay off 40,000 employees at its Mexican retail unit through an initial public offering (IPO), reducing the company’s total headcount from 240,000 to about 180,000.

In the coming years, the bank said it expects to pay up to $1 billion in severance and reorganization costs associated with the planned restructuring.

A Citi spokesman said the layoffs would be global in scope, but declined to break down the numbers by region.

CEO Jane Fraser first announced her major restructuring efforts last September. His plans to overhaul the bank’s management, improve accountability and improve share price, he said, will require staff reductions.

“We say goodbye to some very talented and hardworking colleagues,” Fraser wrote at the time.

Citi shares fell 1.2% in afternoon trading.