Citigroup to cut more jobs despite Covid-19 pledge

Citigroup will resume job cuts starting this week, joining rivals such as Wells Fargo in ending an earlier pledge to pause staff reductions during the coronavirus pandemic.

The cuts will affect less than 1 per cent of the global workforce, the bank said in a statement. With recent hiring, overall headcount probably won’t show any drops, Citigroup said.

The reductions will come as Citigroup is facing a likely revenue drop and another increase to loan-loss reserves this quarter as the pandemic drags on, as well as years of expenses to improve risk controls.

The Office of the Comptroller of the Currency and the Federal Reserve are weighing public reprimands of the firm because of continued deficiencies in its infrastructure and control functions, sources said..

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“The decision to eliminate even a single colleague role is very difficult, especially during these challenging times,” Citigroup said in the statement. “We will do our best to support each person, including offering the ability to apply for open roles in other parts of the firm and providing severance packages.”

The bank said it has hired more than 26,000 people this year, and over one-third of those jobs were in the US. The lender had roughly 204,000 employees at the end of the second quarter.

US banks have resumed job cuts in recent weeks after pledging, en masse, to pause such actions earlier this year. Many firms are pushing to cut costs as the pandemic has dragged on, threatening lenders with higher credit costs and crimping revenue growth. – Bloomberg