The New York bank on Monday said it will resume slashing its workforce this week, joining some of its rivals including Wells Fargo (WFC) - Get Report that are now reducing head count in a bid to rein in costs ahead of what is anticipated to be a rising wave of business and personal loan losses.
The cuts will affect less than 1% of the global workforce, and will likely be offset by recent hiring for other positions throughout the company, the bank said in a statement. The bank said it has hired more than 26,000 people globally this year.
The job cuts come as banks brace for what is expected to be both a drop in revenue and an increase in loan losses as the pandemic and economic downturn continue to take its toll on business and consumer lending, particularly as government aid and other payment deferral programs expire.
It also comes ahead of what is expected to be a heavy reprimand for not being on top of its own risk-management systems.
Specifically, regulators have faulted Citigroup's C-suite for not making risk management in its capital markets and investing divisions more stringent – something highlighted in a recent $900-million mistake involving lenders to Revlon (REV) - Get Report that is also believed to have accelerated the retirement of long-time CEO Michael Corbat.
Citigroup last week announced that Jane Fraser will succeed Corbat as head of the bank effective the end of 2020. Corbat, who has run the bank since 2012, had been expected to retire sometime around 2022. Fraser, who started her career at Goldman Sachs, will become the first woman to lead a major U.S. bank.
Latest Videos From TheStreet and Jim Cramer:
- Coronavirus Update: Pfizer CEO Says Vaccine Could Be Distributed By Year-End
- Why Stocks Are Rising Monday
- Alibaba Ponders Making a $3 Billion Grab for Grab
- Amazon.com Could Be Your Next Employer
- Tesla Gets the Checkered Flag From UBS With Price-Target Boost
- Jim Cramer's Restaurant Updates as NYC Indoor Dining Opens at 25% Capacity