Citigroup to cut 20,000 employees | CNN
Citigroup, one of the world’s largest banks, has recently made headlines with a significant announcement. They plan to lay off a staggering 20,000 employees over the next two years. This bold move comes on the heels of the company reporting a massive $1.8 billion net loss for the fourth quarter of 2023, making it their worst quarter in 15 years. In response to this financial setback, the bank hopes to save $2.5 billion in the long term by reducing their workforce.
The bank’s financial woes were exacerbated by various one-time costs, including a $1.7 billion charge related to a regional banking crisis, an $880 million loss in Argentina, and $800 million in restructuring costs tied to about 7,000 layoffs in 2023. These layoffs are part of Citigroup CEO Jane Fraser’s ongoing efforts to streamline the company, reduce bureaucracy, and improve profits. While Fraser acknowledged the disappointing results, she expressed optimism, calling 2024 a “turning point year” for the bank.
In addition to the 20,000 job cuts, Citigroup plans to shed 40,000 employees from its Mexican retail unit through an IPO, resulting in a significant reduction of their total headcount from 240,000 to around 180,000. This restructuring will also come with a hefty price tag, with the bank expecting to pay up to $1 billion in severance pay and reorganization costs in the coming years.
As high school and college students, it’s essential to understand the intricate connections between business decisions, financial performance, and the impact on employees and stakeholders. We should ponder how such massive layoffs at a prominent institution like Citigroup can affect not only the bank’s future but also the broader economy, job market, and the lives of the affected employees and their families…….
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Rising Dough
How do large-scale layoffs at financial institutions like Citigroup impact not only the bank’s financial health but also the broader economy, the job market, and the well-being of the affected employees and their families?
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