Why Citigroup is laying off 20,000 employees

TheStreet’s J.D. Durkin brings the latest business headlines from the floor of the New York Stock Exchange as markets close for trading Friday, January 12.

Full Video Transcript Below:

J.D. DURKIN: I’m J.D. Durkin reporting from the New York Stock Exchange. Stocks were mixed to close out today’s session. The Dow closed down 117 points, the Nasdaq closed fractionally higher, and the S&P also closed fractionally higher. 

This comes as investors dig through the first batch of fourth-quarter earnings. While the big banks mostly disappointed, Delta reported a solid quarter, though it did trim its forecast for the year ahead.

Separately, investors are digesting better-than-expected inflation data. Producer prices fell 0.1 percent in December, below expectations for a 0.1 percent increase. And this is stirring some optimism… Markets are currently pricing in an over 70 percent chance that the Federal Reserve lowers interest rates in March.

In other news, on the back of disappointing fourth-quarter results, Citigroup is looking to cut costs. In its recent earnings report, the bank announced plans to lay off a total of 20,000 employees over the next two years.

This comes after Citi reported a $1.8 billion dollar loss in its fourth quarter, its worst performance in over 15 years. CEO Jane Fraser called the quarter “very disappointing” and hopes that 2024 will be a turning point for the bank.

This reduction in headcount is expected to pay off for the company… eventually. Citi says the move will save the company $2.5 billion dollars over the long term. But in the short term, the company is expected to incur one billion dollars in expenses related to severance and restructuring.

That’ll do it for your daily briefing. From the New York Stock Exchange, I’m J.D. Durkin with TheStreet.

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