The news that a major U.S. bank is set to initiate ‘massive layoffs’ is causing shockwaves throughout the financial industry.
According to The Daily Caller, Citigroup is scheduled to issue layoff notices as early as Wednesday. This move is reportedly part of a ‘corporate overhaul as the company seeks to trim its operating expenses.’
Administrators at Citigroup have announced a second round of layoffs that will impact higher-level employees, including managing directors and multiple chiefs of staff. CNBC reports that these layoffs will be implemented next week.
Furthermore, a third round of layoffs is anticipated, expected to occur in February 2024.
In response to the layoffs, a statement from Citigroup acknowledged, “We’ve acknowledged the actions we’re taking to reorganize the firm involve some difficult, consequential decisions, but they’re the right steps to align our structure to our strategy and deliver the plan we shared at our 2022 Investor Day.”
Citigroup’s CEO, Jan Fraser, assumed leadership of the company in March 2021. In September of the same year, several senior executive roles were consolidated. During that announcement, Fraser indicated that at least 10% of the workforce would be cut in the upcoming months.
Fraser supports the decision to trim the company by citing a study in Barron’s, which noted that “JPMorgan has 65% more assets than Citigroup, but only 29% more employees.”
Since Jan Fraser assumed leadership at Citigroup, the third-largest bank in America, its performance has been less than stellar, with a significant dip of approximately 40% in stock value over the past two years.
In contrast, JPMorgan reported a substantial 35% increase in income during the third quarter of this year.
Fraser noted that employees who lose their jobs can apply for other positions within the company, although there will be limited opportunities due to the scarcity of available positions.
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