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Wednesday, February 28, 2024
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    HomeWorld News"Citigroup's Strategic Shift: 20,000 Job Cuts as CEO Jane Fraser Aims for...

    “Citigroup’s Strategic Shift: 20,000 Job Cuts as CEO Jane Fraser Aims for Enhanced Returns”

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    Citigroup to Cut 20,000 Jobs as CEO Fraser Aims for Improved Returns

    In a significant move to boost returns, Citigroup Inc. is set to eliminate 20,000 roles, incurring as much as $1 billion in severance and reorganization costs in 2024. The restructuring is part of Chief Executive Officer Jane Fraser’s ambitious plan to streamline Citigroup, marking one of the largest overhauls in decades for the Wall Street giant.

    CEO Jane Fraser initiated this comprehensive restructuring in September, with the goal of improving the bank’s returns and simplifying its organizational structure. The expense outlook for the year indicates a decrease from the $56.4 billion spent in 2023, with total expenses projected to be between $53.5 billion and $53.8 billion, as announced by the New York-based bank on Friday.

    Despite the positive outlook for cost savings, Citigroup faced a disappointing fourth quarter, marked by the worst performance in five years for its fixed-income traders. The rates and currencies business suffered a 25% slump in revenue to $2.6 billion due to a decline in client activity in the final weeks of the year.

    CEO Jane Fraser acknowledged the challenges in the fourth quarter but expressed optimism about the bank’s trajectory in 2024, stating, “Given how far we are down the path of our simplification and divestitures, 2024 will be a turning point.”

    Fraser’s restructuring plan aims to eliminate bureaucracy, reducing the management layers from 13 to just eight. The 20,000 job cuts include roles affected by the restructuring as well as dismissals that would have occurred regardless.

    Fraser has set a medium-term goal to achieve a return on tangible common equity of at least 11% by 2027. The quarterly results revealed a $1.8 billion loss, or $1.16 a share, with one-time items such as a $780 million charge related to severance offered to affected employees and a $1.7 billion charge for a special assessment to replenish the Federal Deposit Insurance Corp.’s coffers after bank collapses last year.

    As Citigroup navigates through this extensive restructuring, industry observers will closely monitor how the bank adapts to the changing landscape and the impact of the job cuts on its overall performance. Fraser’s vision for a more streamlined and efficient Citigroup will undoubtedly shape the financial giant’s trajectory in the coming years.

    Sources By Agencies

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