COMP NEWS – Citigroup, a multinational financial services corporation, is reducing its workforce by about 8% after a ‘disappointing’ quarter.

Jan 12 – Citigroup (C.N) said it would cut 20,000 jobs over the next two years, acknowledging a “clearly disappointing” quarter marred by one-off charges that resulted in a $1.8 billion loss.

Shares of the bank – which is in the middle of a multi-year effort to cut bureaucracy, increase profits and boost a stock that has lagged peers – are up more than 1%.

“The fourth quarter was very clearly disappointing,” CEO Jane Fraser told analysts. “We know that 2024 is critical.”

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, Chief Financial Officer Mark Mason told reporters.

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, eventually aiming to reach a staffing level of 180,000 employees, Mason said.

Following the reduction, Citi will focus on internal restructuring, hoping to power through changes that are “tough on morale.”

Still, some analysts said results from the third-largest U.S. lender by assets appeared strong when the one-off charges were excluded.

“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.

The loss was driven by $3.8 billion in charges disclosed in a filing on Wednesday that 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 bank expects to report between $700 million and $1 billion in charges this year related to severance costs and the reorganization.

“Whenever an industry or company goes through these types of reductions, it’s tough on morale,” Mason told reporters. The staffing cuts will not affect revenue growth, he said.

During the week of Jan. 22, the bank will announce more organizational changes, according to a memo to staff seen by Reuters. Efforts to simplify its structure will be largely completed this quarter, saving $1 billion and eliminating about 5,000 mostly managerial roles, Fraser said.

To read more about Citi’s cuts to its workforce, click here.

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