Citigroup Inc. (NYSE:C) is preparing to lay off 286 employees based in New York City, according to notices filed with the State Labor Department.

The job cuts are expected to be implemented before May 3 and will affect 239 employees in the primary banking unit, 44 in the global markets broker-dealer units, and three in a technology unit, as outlined in the Worker Adjustment and Retraining Notifications.

These layoffs are part of Citigroup’s broader plan to eliminate 20,000 positions by 2026, marking its most extensive restructuring effort in 15 years.

The company aims to streamline its management layers from 13 to eight, with the organizational simplification initiative expected to be completed by the end of the first quarter of 2024.

By optimizing management layers and reducing functional roles, Citigroup aims to reduce bureaucracy, enhance accountability, and expedite decision-making processes to improve client satisfaction.

Following a fourth-quarter 2023 net loss of $1.8 billion, these job cuts are intended to enhance the company’s financial performance. It is estimated that these measures will result in savings of $2-$2.5 billion over the medium term.

For 2024, Citigroup expects adjusted expenses to range from $53.5-$53.8 billion, lower than the previously mentioned $54.3 billion. The decline in expenses is expected to be driven by the benefits of organizational simplification, exits from various international businesses, and the discontinuation of non-viable segments such as the municipal business and a subset of distressed debt trading. However, these savings will be partially offset by increased investments in risk and controls.

While these measures are expected to strengthen Citigroup’s focus on its core strengths, the restructuring process, including the layoff of approximately 5,000 managerial employees, is anticipated to result in severance costs and additional expenses between $700 million and $1 billion, which are included in the 2024 expense guidance.

Citigroup’s shares have shown a 17.2% increase in the past three months, outperforming the industry’s 14.3% growth.

Featured Image: Freepik

Please See Disclaimer