Citigroup to slash 20000 jobs to boost returns

Citigroup is planning a significant restructuring effort by eliminating 20,000 roles to achieve cost savings and improve its returns. 

The move is part of CEO Jane Fraser's strategy to revitalize the performance of the bank. The firm expects to save as much as $2.5 billion, with firmwide expenses projected to decrease to a range of $51 billion to $53 billion over the medium-term.

However, in the short term, Citigroup anticipates incurring up to $1 billion in expenses related to severance payments and the broader overhaul initiated by Jane Fraser. It's common for companies undergoing such restructuring to face initial costs before realizing the benefits of the changes. The exact timeframe for these expense reductions and savings hasn't been clarified in the information provided.

Citigroup expects costs for the year to be between $US53.5 billion and $US53.8 billion, down from $US56.4 billion in 2023. 

Despite a disappointing fourth quarter with a $1.8 billion loss, CEO Jane Fraser sees 2024 as a turning point due to ongoing simplification and divestitures. The restructuring includes eliminating 20,000 roles and reducing management layers. Fraser aims to achieve a return on tangible common equity of at least 11% by 2027. The fourth quarter loss includes one-time items, such as a $780 million charge for employee severance. Citigroup's shares rose 1% to $US52.62.