Citigroup has decided to restart job cuts in a bid to save costs while grappling with high expenditure on risk controls after regulatory scrutiny.
The lender joined its rival Wells Fargo in lifting the temporary pause on retrenchments, Bloomberg reported.
Earlier this year, Citi pledged to halt its plans to reduce headcount, in the wake of the Covid-19 pandemic.
The latest redundancies will affect less than 1% of the bank’s total workforce of 204,000 people, the report added.
However, due to a recent hiring, there will be no change in the overall headcount. The bank has hired 26,000 this year.
In a statement, Citigroup said: “The decision to eliminate even a single colleague role is very difficult, especially during these challenging times.
“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 decision comes after the Wall Street lender named Jane Fraser as its first female CEO last week.
The layoffs are a result of an anticipated drop in Citigroup’s revenues, while bad loans surge this quarter, in addition to the years of expenses in improving its risk controls.
In this year alone, Citigroup has spent $1bn in its efforts to improve its risk functions after it mistakenly sent $900m of its own money to Revlon lenders.
This comes after discussions with US watchdogs Federal Reserve and the Office of the Comptroller of the Currency (OCC), the Bloomberg report added.
In a separate statement, Citigroup said: “While we never comment on our discussions with regulators, we are completely committed to improving our risk and control environment.”
Recent job cuts
Last week, top Canadian banks also resumed layoffs to cut costs amid the current situation.
Last month, Co-op Bank decided to slash 350 jobs and shutter 18 branches, due to Covid-19.
Meanwhile, Wells Fargo resumed layoffs after the Covid-19 hiatus.
NatWest decided to slash nearly 500 retail banking jobs to cut costs in the wake of the pandemic.
British lender TSB decided to phase out cashier roles by next year, which could put hundreds of jobs at risk.