Citigroup job cuts to hit 5,000 by end-June
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The firm’s recent job cuts will cause expenses to climb by as much as US$400 million (S$537.8 million) this quarter compared with the first three months of the year.
PHOTO: REUTERS
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New York – Citigroup will have cut 5,000 jobs by the end of June, mostly in investment banking and trading,
The cuts, which represent 2 per cent of the banking giant’s total headcount, were disclosed by chief financial officer Mark Mason at an investor conference on Wednesday.
Mr Mason said that so far in 2023 the banking giant has set aside severance for 5,000 employees affected by job cuts.
He added that Citigroup expects to record severance costs tied to the departure of 1,600 employees in the second quarter, which mostly affected its investment banking and trading divisions.
One person with knowledge of the matter said the job cuts include people that worked in units Citi decided to divest, but did not specify the number.
Although not all the people have left the firm, most were already notified, the person added.
The firm’s recent job cuts will cause expenses to climb by as much as US$400 million (S$537 million) this quarter compared with the first three months of the year. “We remain expense-disciplined around driving costs out,” Mr Mason said. “Sometimes that means reducing headcount.”
Separately, Mr Mason warned that trading revenue has dropped 20 per cent so far this quarter after the congressional debate over the debt ceiling weighed on client activity for much of the period.
Revenue from the firm’s investment banking division has dropped about 25 per cent so far this quarter, in line with industry levels, he said.
“The debt ceiling concerns certainly did weigh on the investor client base, in particular in April and May,” he said. “We haven’t seen volatility or activity pick up in the early days of June.”
Wall Street’s trading desks have been contending with a slowdown in volatility from a year ago, when central bank interest rate hikes and Russia’s invasion of Ukraine spurred activity across markets.
Citigroup’s markets division brought in roughly US$5.29 billion in revenue in the second quarter of 2022, compared with US$805 million generated by the firm’s investment bankers in the same period.
In May, Citigroup announced it now plans to sell shares of its Banamex unit in an initial public offering, ending talks for a potential sale to a local buyer in a deal that faced complications from Mexico’s President Andres Manuel Lopez Obrador.
The decision allowed the US bank to restart stock buybacks this quarter, and Mr Mason said on Wednesday that the firm expects to repurchase about US$1 billion in shares for the period.
BLOOMBERG, REUTERS
