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Citigroup (NYSE:C) layoffs are the talk of Wall Street today after the investment bank announced that it will cut 20,000 roles, or 10% of its workforce, in a bid to save as much as $2.5 billion amid slowed revenue. So, what do you need to know about C job cuts lately?
The move comes as Chief Executive Jane Fraser’s latest cost-cutting scheme. Indeed, after a disappointing fourth quarter in which Citigroup’s fixed-income traders endured their worst slump in five years, the firm is attempting to regain its footing. Reasonably so, the business’s revenue slid 25% to $2.6 billion.
“The fourth quarter was very disappointing,” Fraser said in the statement. “Given how far we are down the path of our simplification and divestitures, 2024 will be a turning point.”
Citigroup seems to be feeling the impact of higher lending rates as client activity slows to a crawl.
The 20,000 job cuts include layoffs stemming from the Citigroup restructuring that Fraser started back in September. Fraser said the move will slim the company’s management layers to eight from 13.
Citigroup Layoffs Boost C Stock
The reorganization is set to start in the week of January 22, Fraser noted to staffers. The bank expects to conclude the accompanying job cuts by the end of Q1. The majority of the cuts will be positions held by managers.
“We are moving quickly, but we are doing it thoughtfully,” Fraser said in the memo. “Many considerations go into each phase of the work: we think about the right structure, we think about the right talent, and we think about how each decision advances our overall goal of simplifying the firm.”
Fraser estimates the layoffs will boost the company’s return on tangible common equity — a gauge of profitability — by more than 10% by 2027, a point she reiterated on Friday.
Interestingly, investors seem to see promise in the broad restructuring. Indeed, C stock is up about 1% heading to the bell, up more than 35% since October. Whether it can keep up the momentum as it continues its management reorganization process remains to be seen.
On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.