Your Evening Briefing: Citi to Cut 20,000 Roles in CEO’s Bid to Boost Returns

Citigroup said it will eliminate 20,000 roles in a move that will save it as much as $2.5 billion as part of Chief Executive Officer Jane Fraser’s quest to boost the Wall Street giant’s lagging returns. Firmwide expenses are expected to drop to an annual range of $51 billion to $53 billion over the medium-term, Citigroup said. In the meantime, though, the firm expects to incur as much as $1 billion in expenses tied to severance payments and Fraser’s broader overhaul of the bank. The outlook for cost savings helped mask a disappointing fourth quarter, when Citigroup’s fixed-income traders turned in their worst performance in five years. Revenue from the business slumped 25% to $2.6 billion.

For all the pain the Federal Reserve’s rapid rate hikes caused for many regional lenders, it was a boon for the biggest banks. In 2023, the four giants raked in $253 billion in net-interest income — the difference between what it earns on its assets and what it pays on its debts — about $80 billion higher than 2021’s total. Now, most banks see rate cuts coming, all while they have to pay more on deposits or risk losing customer savings to higher-yielding options.