LouNDebNC: Top U.S. bank begins massive layoffs
By Will Kessler
One of the U.S.’ top banks will begin massive layoffs on Wednesday in a corporate overhaul as the company seeks to trim its operating expenses to levels more in line with its competitors, according to CNBC.
Citigroup will begin cutting employees on Wednesday, with new terminations continuing to be announced through next week, affecting some chiefs of staff, managing directors and lower-level employees, according to CNBC. Following the initial round of layoffs, more employees in less senior positions are expected to be dismissed in February, with the layoffs being expected to be fully completed by March 2024.
“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 said in a statement to the Daily Caller News Foundation.
Jane Fraser, CEO of Citigroup as of March 2021, began the shuffle on Sept. 13 after a memo resulted in the dismissal of a number of senior executives while consolidating to just five division heads that report directly to her, according to CNBC. At least 10% of employees at the bank are expected to be dismissed, but the full amount has yet to be determined, with laid-off employees being able to apply for other positions across the company.
Citigroup is America’s third-largest bank by assets but has the second-largest workforce, with 240,000 employees as of the third quarter of 2023, compared to 308,669 at the largest bank, JPMorgan Chase, according to Barron’s. JPMorgan has 65% more assets than Citigroup, but only 29% more employees.
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Wells Fargo, Bank of America and JPMorgan all boast significantly greater profits as compared to expenses than Citigroup, according to Barron’s. The stock price of the bank has also taken a hit since Fraser began as CEO, dropping 40%.
America’s megabanks have been posting huge profits since the sector was shaken by a banking crisis earlier this year after a few regional banks, including First Republic Bank, shut down following a series of bank runs. JPMorgan, which acquired First Republic, reported that its net income was up 35% in the third quarter of 2023.
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