Heaptalk, Jakarta — Global Investment Bank and Financial services company Citigroup declared that the group plans to cut around 20,000, representing 8% of employees, for two years ahead after closing a business loss of up to US$1.8 billion, approximately Rp27.96 trillion, in the fourth quarter (Q4) last year.
Previously, the group also laid off about 1% of employees out of 240,000 people as of March last year. The affected team came from the entire operational team, technology division, and United States mortgage underwriting unit. On the other hand, the company also cut about 30 employees in the investment banking unit and another 20 teams in its London-based banking line by June 2023.
The Chief Financial Officer of Citigroup, Mark Mason, said, “When the industry or company experiences cutbacks, it hurts morale. I intend to prove that the company has executed a business strategy related to the momentum we expect.”
This banking company claimed that this loss was caused by Citigroup’s costs of US$3.8 billion, which were disclosed in an information disclosure on the US Exchange. The expenses included reorganization costs, reserves related to currency devaluation and instability in Argentina and Russia, and a US$1.7 billion payment to replenish the government’s deposit insurance fund.
Citigroup’s revenue also fell by 3%, to US$17.4 billion in the 4th quarter, compared to the previous year. This was the first time Citigroup released revenue for its five businesses, including services, markets, banking, US private banking, and wealth, previously housed under broader divisions.
Besides, revenue from the market or trading division fell by 19%, to US$3.4 billion from the previous year. This decline was caused by a 25% drop in fixed income due to sluggish interest rates, currency markets, and losses that Argentina faces.
Meanwhile, the banking revenue elevated by 22%, attaining US$949 million, boosted by higher investment banking fees for debt capital markets and advisory work that offset a decline in corporate lending.
“The fourth quarter was decidedly disappointing. We know this year is a critical moment. The job cuts will save the company US$1 billion in expenses and eliminate around 5,000 mostly managerial roles.” The CEO of Citi, Jane Fraser, said.
