The layoff notices started going out this week at Citigroup, and they won't stop anytime soon. America's fourth-largest bank by assets is eliminating approximately 1,000 positions as part of CEO Jane Fraser's ambitious—and controversial—plan to transform an institution that has frustrated shareholders for the better part of two decades.

The cuts are the latest installment in a restructuring that will ultimately eliminate 20,000 jobs by the end of 2026, reducing Citigroup's workforce from roughly 240,000 to approximately 180,000. It's a painful process, but one that Fraser argues is essential to closing a performance gap that has made Citi the laggard among major U.S. banks.

The Scale of the Transformation

When Fraser took the helm in 2021, she inherited a sprawling financial conglomerate that had underperformed peers for years. Citigroup's return on tangible common equity—the key measure of bank profitability—consistently trailed JPMorgan, Bank of America, and even troubled Wells Fargo.

Her diagnosis was blunt: Citigroup had become a "financial supermarket" with too many businesses, too much complexity, and too little focus. The remedy involves:

  • Exit Consumer Banking Abroad: Citigroup is withdrawing from retail banking in 14 markets across Asia, Europe, and the Middle East, focusing instead on institutional clients and wealth management.
  • Sell Banamex: The planned IPO of Citigroup's Mexican retail arm will remove approximately 40,000 employees and significant complexity from the organization.
  • Simplify the Structure: Fraser has reorganized the bank into five primary business lines with clearer accountability, eliminating layers of management and overlapping functions.
  • Invest in Technology: Billions are being spent to modernize systems and address long-standing regulatory concerns about data governance and risk management.

"We will continue to reduce our headcount in 2026. These changes reflect adjustments we're making to ensure our staffing levels, locations, and expertise align with current business needs."

— Citigroup official statement

The Human Cost

Behind the strategy presentations and earnings targets are real people losing their jobs. The 1,000 positions being eliminated this week span multiple divisions and geographies, affecting employees who in many cases have spent years or decades at the bank.

Citigroup's layoffs are part of a broader wave hitting Wall Street this January. BlackRock is cutting approximately 250 positions, Meta is eliminating over 1,000 jobs from its Reality Labs division, and dozens of other companies have filed WARN notices signaling impending reductions.

For affected Citi employees, the bank has offered severance packages consistent with its policies, though the specifics vary by role, tenure, and location. The timing—just before fourth-quarter earnings and during the first weeks of the new year—adds stress to an already difficult situation.

Will It Work?

The critical question is whether Fraser's restructuring will finally deliver the returns that have eluded Citigroup for so long. Early signs are mixed:

  • Progress on Returns: Citigroup is targeting 10-11% return on tangible common equity, up from high-single-digits historically. The bank made progress toward this goal in 2025.
  • Revenue Resilience: Despite the divestitures, Citigroup's core institutional businesses have performed well, benefiting from strong trading volumes and recovering investment banking activity.
  • Execution Risks: Restructurings of this magnitude frequently encounter problems. Technology migrations, talent retention, and client relationships all face disruption during transformations.
  • Regulatory Overhang: Citigroup remains under consent orders related to data and risk management deficiencies. Resolving these issues is essential to the turnaround but remains a work in progress.

Q4 Earnings Preview

Citigroup reports fourth-quarter results on Wednesday, providing investors their next opportunity to assess Fraser's progress. Analyst expectations suggest meaningful improvement:

  • Earnings per share projected between $1.62 and $1.81, representing approximately 25% year-over-year growth
  • Revenue expected to remain stable despite business exits
  • A $1.2 billion pre-tax loss related to the final divestiture of Russian operations

The Russia write-off is a legacy issue—Citigroup was more exposed to the Russian market than peers when sanctions hit in 2022—but it illustrates the challenges of unwinding complex operations in difficult environments.

The Investor Perspective

Citigroup shares rose approximately 40% in 2025, tracking the broader bank sector rally but still trading at a significant discount to peers on price-to-book value. The discount reflects lingering skepticism that Citi can achieve sustainable improvement.

Bulls argue the transformation is on track and the stock remains undervalued relative to its eventual earnings power. Bears counter that Citigroup has disappointed before and that execution risks remain substantial.

What Comes Next

For Citigroup employees, the next two years promise continued uncertainty as the restructuring plays out. For shareholders, the period will determine whether Fraser's gambit succeeds in creating a leaner, more profitable institution—or whether Citi remains the perpetual underperformer it has been for so long.

The 1,000 jobs cut this week are painful but not surprising. In corporate transformations of this scale, such announcements become routine until the restructuring reaches its conclusion. The real test comes after, when Citigroup must prove that the pain was worth the gain.