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Citigroup facing $400 million bill for severance costs over 1,600 job cuts

By Nithya Bose in US business news, posted June 15, 2023

Citigroup CFO Mark Mason announced severance costs related to approximately 1,600 job cuts in the second quarter will cost the company $300 to $400 million.

Speaking at a conference in New York, Mason said the payments for the quarter would be higher compared to the first quarter because of the cuts.

It is primarily due to restructuring and repositioning charges.

The bank has been implementing a headcount reduction of 5,000 employees across various areas, particularly in banking, markets, and functions.

While the number of cuts in divested units was not disclosed, sources said the layoffs include employees from divisions Citigroup decided to exit.

Most affected people have already been notified, although not all have left the firm yet.

Citigroup has already divested from seven of the 14 markets it plans to exit, with its Mexican unit set to be spun off next year and listed in 2025 following unsuccessful sale discussions.

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Mason also warned investors about declining revenues in investment banking and trading.

Markets revenues have dropped by 20 percent this quarter compared to last year.

In investment banking, Mason anticipates a 25 percent year-over-year decrease in revenues.

While he acknowledged some positive signs in debt capital markets activity, predicting the rebound timing remains challenging.

Goldman Sachs Group's president also recently forecasted a potential 25 percent slump in trading revenue for this quarter.

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