The announcement that a leading U.S. bank is set to begin “massive layoffs” is sending shockwaves throughout the financial sector.
The Daily Caller reported that Citigroup will begin serving layoff notices as soon as Wednesday. The move is reportedly part of a “corporate overhaul as the company seeks to trim its operating expenses.”
Citigroup administrators announced a second round of layoffs, which will impact higher-level employees such as managing directors and several chiefs of staff, will be rolled out next week, according to CNBC.
A third round of layoffs is expected in February 2024.
A Citigroup statement published by the Daily Caller noted: “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.”
Jan Fraser, Citigroup’s CEO took control of the company in March 2021. Several senior executive roles were consolidated in September. Fraser announced at that time that at least 10% of the workforce would be cut in the coming months.
Fraser supports the move to trim the company by citing a study in Barron’s, which noted that “JPMorgan has 65% more assets than Citigroup, but only 29% more employees.”
Citigroup, the third largest bank in America, has not performed as well since Fraser took the help — dropping approximately 40% of its stock value in two years. In contrast, JPMorgan reported an income boost of 35% in the third quarter of this year.
Fraser noted that employees who lose their positions may apply for other positions in the company — though few positions in the company will be available.
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