Citigroup will have cut 5,000 jobs by the end of the month, mostly in investment banking and trading, after a prolonged slump in deal-making.
Still struggling to get back on its feet more than a decade after the financial crisis, the bank has laid off thousands of workers since the beginning of the year. A person familiar with the cuts said hundreds more are expected to be told their jobs have been cut by the end of June.
The cuts, which represent 2 percent of the bank’s total workforce, were announced Wednesday by CFO Mark Mason at an investor conference. He warned that severance payments related to 1,600 of the layoffs would weigh on earnings in the second quarter.
Mason said job loss controls along with other “restructuring or repositioning costs” would increase costs by as much as $400 million in the second quarter compared to the first three months of the year.
He said Citigroup was investing in technology that would allow it to work with fewer employees. “We continue to control costs to reduce costs and gain efficiencies,” said Mason. “And sometimes that means cutting the workforce.”
He also predicted that revenues from Citi’s trading business would likely be down 20 percent in the second quarter compared to the same period last year, in part due to a slowdown in May trading triggered by a crisis in Washington over the US debt ceiling. .
Citi, which is winding down its consumer banking presence outside the US, had 240,000 employees worldwide at the end of March, compared with 228,000 a year earlier. Citi shares fell 0.9 percent.
Citi is the latest bank to announce job cuts this year in the worst period for Wall Street layoffs since the Great Financial Crisis. The cuts underpin bank executives’ beliefs that they have overhired during an increase in deal-making during the pandemic and that the recent cold in mergers and stock and bond offerings is likely to continue.
Last month, Morgan Stanley announced it was cutting 3,000 jobs, representing about 5 percent of its workforce. Goldman Sachs has cut its workforce by a similar number this year and has signaled further layoffs likely.