Citigroup, which was previously rumored to be planning massive layoffs, has finally made the decision. The bank announced on Friday when releasing its fourth-quarter earnings report that it will cut 20,000 jobs, with an expected cost savings of up to $2.5 billion.
This is part of Citigroup CEO Jane Fraser's organizational restructuring plan. Citigroup stated that after the layoffs, the company's overall expenses are expected to decrease to a range of $51 billion to $53 billion in the medium term. At the same time, the company expects to incur expenses of up to $1 billion for severance payments and comprehensive organizational restructuring.
The prospect of cost savings helps overshadow Citigroup's poor performance in the fourth quarter. The bank's fixed-income trading business delivered its worst performance in five years in the fourth quarter, as interest rates and foreign exchange business were hit by a decline in client activity in the final weeks of the year. The business's revenue declined by 25% to $2.6 billion.
After the announcement of the layoff plan, Citigroup's stock price briefly rose nearly 1% at the opening on Friday, but quickly turned downward and is currently down over 1% at $51.49.
Fraser launched the largest restructuring in decades for Citigroup in September last year to improve profitability. She stated that these measures will enable the bank to eliminate bureaucracy, reducing its management layers from 13 to just eight. She said that this reform will help improve the key profitability indicator she focuses on, namely raising the return on tangible common equity to at least 11% by no later than 2027. She reiterated this mid-term guidance on Friday.
Ultimately, by the end of 2026, the company's total workforce will be reduced by 60,000 positions to 180,000. This includes the 20,000 positions being cut this time, as well as 40,000 employees who will leave after Citigroup's initial public offering of its Mexican consumer, small business, and middle-market banking operations.

Citigroup announced on Friday that it will cut 20,000 jobs, expecting to save as much as $2.5 billion. The overall expenses are projected to decrease to a range of $51 billion to $53 billion in the medium term.

The axe has fallen! Citigroup to lay off 20,000 employees.