Citigroup to Lay Off Less Than 1% of Staff - Source

Citigroup to Lay Off Less Than 1% of Staff - Source


Citigroup to Lay off Less Than 1 of Staff  Source

Citigroup is expected to reduce staff by less than 1%, according to a report. These cuts will affect investment banking, operations and technology at the New York-based bank.

Citigroup will continue its downward spiral as it deals with numerous writedowns across its global banking and capital markets businesses. Furthermore, the firm plans to shutter its American mortgage-underwriting subsidiary.


With the economy still weak, several technology companies are taking measures to reduce their workforces. Citigroup is among them; they plan on laying off less than 1% of their staff in an effort to become more efficient and reduce expenses.

People familiar with the company's plans indicate that the cuts are intended for various businesses, such as corporate banking and investment banking. According to those familiar with its intentions, approximately 1,000 employees will be affected by these measures.

Reorganizations such as this come at a time when many companies are scrambling to boost revenues amid an uncertain US economy and high mortgage rates. To stay afloat, these firms are cutting costs and improving efficiency to position their businesses for future growth.

Meanwhile, the US housing market is witnessing an uptick in foreclosures, potentially leading to job cuts across the industry. As demand continues to decline, lenders and mortgage fintechs are searching for creative ways to reduce expenses.

Banks are currently focused on restructuring their balance sheets to mitigate risks. The company has been cutting workers in order to reduce overhead expenses and better prepare for potential losses from an impending recession.

JPMorgan Chase is another bank set to cut jobs, announcing on February 22 that it would dismiss hundreds of workers in its home lending unit. These moves follow in the footsteps of Citigroup and Goldman Sachs, both of whom are also purging staff in their lending divisions.

Bank executives noted that the cuts were part of routine business planning and not a mandate to eliminate certain numbers of employees. Instead, decisions were made based on individual needs across various divisions within the bank.

Furthermore, these layoffs will enable the bank to refocus its efforts in areas of growth which it believes are most promising. This will enable it to expand into new markets and diversify its business, which is essential for any financial institution.

Citigroup anticipates saving approximately $500 million through these cuts in 2022, which should be enough to cover the expenses associated with reorganization. This marks Citigroup's third major restructuring in two years and underscores their ongoing quest to remain financially sound.


Citigroup has informed people familiar with the matter that less than 1% of its staff will be laid off, according to people familiar with the situation who asked not to be identified discussing personnel information. Those affected include personnel in its investment banking division and operations and technology organization as well as its US mortgage-underwriting arm.

These cuts come as the company attempts to streamline its operations and focus on core business areas such as investment banking and commercial banking. Reorganization efforts are expected to reduce costs and boost efficiency at the bank.

Other companies have recently cut staff in an effort to save costs. PayPal announced in January that it was cutting 7% of its staff (2,000 positions), likely due to the challenging macroeconomic environment and competitive landscape.

On July 22nd, electric automaker Rivian Automotive announced it would cut 6% of its staff. This comes after it already reduced 5% of its personnel last July and 10% in May.

Genesis Trading recently cut 30% of its staff due to "current and anticipated market demand." The reductions were part of a plan to align their resources with customers' needs.

Goldman Sachs also took a hit from the layoff wave, cutting as many as 3,200 jobs according to multiple outlets.

Other major banks, such as JPMorgan Chase & Co. and Morgan Stanley, have recently reduced their staffs following a difficult year for dealmaking activity. These cuts were partly prompted by recessionary fears caused by the Federal Reserve's strict monetary policy.

One of the primary reasons banks are cutting staff is to reduce employee benefits costs. These cuts are necessary in order to balance operations against revenue, which is essential for long-term success of a bank.

However, some cuts are more efficient than others. For instance, Goldman's January reorganization resulted in the loss of thousands of jobs across its global operations.

Another example of job cuts done efficiently is KPMG, which could eliminate 2% of its staff. This would mark the first major accounting firm to do so as it seeks to align workers with current and anticipated market demand.

Job Loss

Citigroup is expected to cut less than 1% of its staff as it seeks to restructure the business, according to Bloomberg News. This comes in response to regulators' consent order from 2020 that required it to enhance risk management and internal controls, according to the financial giant.

Citigroup boasts a strong reputation and record of success, but the bank will face considerable obstacles in the years ahead. These include regulatory requirements and increased competition from fintech startups that require it to stay vigilant and adaptable. Furthermore, ongoing economic uncertainty and geopolitical risks could potentially impact their revenue streams.

With these concerns in mind, the bank is taking measures to restructure its business in a way that will enable it to prosper and continue growing. It has already begun refocusing resources on key areas like investment banking and commercial banking, which will generate greater revenues in the future.

The company boasts a global presence that sets it apart in the financial industry. This has been one of its key advantages, enabling it to weather market volatility and generate steady revenue streams over recent years despite economic fluctuations.

Citigroup is investing heavily in technology and digital infrastructure, which will enhance its overall efficiency. This strategy is anticipated to boost the company's competitiveness within the industry and allow it to provide better service for customers.

However, the bank's technology initiatives are in their early stages and will take some time to fully develop and implement. Thus, it may have difficulty transitioning away from manual processes in the long run.

Meanwhile, the company is laying off hundreds of employees as it works to restructure its operations and address past problems. This will involve several divisions such as mortgage-underwriting and investment banking businesses.

Impact on Share Price

Citigroup's announcement to reduce staff by less than 1% is another indication that Wall Street banks are facing challenges due to market volatility and weak deal-making activity. In recent years, they have had to contend with regulatory requirements as well as increased competition from fintech startups.

Despite these obstacles, the company continues to operate profitably and boasts strong loan quality. Furthermore, it has managed to reduce costs and shrink employee headcount while reinvesting in its operations.

It is essential to note that these reductions are not expected to have an impact on the bank's dividend payments. Furthermore, given its high regulatory capital level, the Federal Reserve may not limit dividend increases until after this year's annual stress tests are concluded.

Therefore, the bank's shares are up 11% so far in 2023, outpacing the general market by more than 5%. This indicates that investors remain bullish on banks even with lower revenue and declining earnings expectations.

Citigroup is a formidable competitor and has built its reputation on delivering financial results. Its global business portfolio encompasses investment banking, commercial banking, and wealth management sectors alike.

Over the past several years, the company has invested significantly in technology and digital infrastructure. This has allowed it to expand globally and improve their online banking and mobile app services.

Citigroup now operates in over 160 countries and territories, making it easier for the company to reach customers around the world, particularly Asia.

The company, headquartered in New York City, employs more than 240,000 personnel worldwide. As of the fourth quarter of 2022, its market value stood at $173.4 billion.

Recently, several companies have announced plans to reduce their workforces. These include Thoughtworks, General Motors, Waymo, Twitter and Palantir - collectively impacting hundreds of employees. Each firm will offer severance pay and benefits to those affected by these layoffs as well as outplacement services or job training for affected personnel.

Ericsson Pleads Guilty to US Charges

Swedish telecom giant Ericsson has admitted to U.S. charges related to its ongoing bribery scheme to obtain business in Djibouti, China, Vietnam, Indonesia and Kuwait.

The company is paying more than $206 million to the US government in 2019 for violations of a deal it struck with the Department of Justice. Furthermore, they have extended their monitorship for another year until June 2024.


Ericsson has admitted guilt and agreed to pay over $206 million in penalties after violating a prior deal with the US over 17 years of corrupt payments. According to Justice Department reports, they were caught paying bribes and falsifying records in Djibouti, China, Vietnam, Indonesia and Kuwait.

The Justice Department's criminal investigation revealed that Ericsson engaged in a scheme with third-party agents to launder money, pay off-the-books slush funds and cook its books to secure telecom contracts from state-owned customers in at least five countries. Furthermore, it used false invoices to conceal these bribes.

In the end, the Department of Justice determined that Ericsson's bribery cost it over $382 million in profits - making this amount the second-highest penalty ever levied against a U.S. company for violations under the FCPA.

A major aspect of the settlement was a deferred prosecution agreement (DPA), under which the company could avoid prosecution for three years if it paid a substantial penalty, implemented "rigorous internal controls," adhered to U.S. laws and cooperated with investigations into potential future violations.

However, Ericsson's cooperation was not as robust as the Department of Justice had hoped and it breached its DPA by failing to disclose information related to bribery schemes in Djibouti and China, as well as activities in Iraq that could be seen as violating the FCPA's anti-bribery provisions. Furthermore, it failed to report evidence regarding other potential violations of anti-bribery and accounting requirements under the FCPA, according to the DOJ.

Due to these breaches, Ericsson was ordered by the Department of Justice to pay a $1.2 billion fine in the first quarter. Borje Ekholm, president and CEO of Ericsson, promised that they would take steps in the future to prevent such issues arising again.

The US government is unafraid to revisit and re-examine agreements like the one Ericsson breached. It has warned a number of companies that it will continue punishing repeat offenders.

A major component of the settlement was a deferred prosecution agreement (DPA), in which the company agreed to pay a criminal penalty and retain an independent compliance monitor for three years as long as it complied with United States laws and cooperated with ongoing investigations. Furthermore, according to Department of Justice standards, they had to disclose information related to their bribery schemes in Djibouti and China, as well as activities in Iraq which might violate FCPA anti-bribery or accounting provisions.


Telecoms giant Ericsson has pleaded guilty and agreed to pay a criminal penalty of $206 million after breaking an earlier deal with the U.S. government for failing to disclose its activities in Iraq, China and Djibouti. According to Justice Department information on Thursday, Ericsson acted in breach of their deferred prosecution agreement entered into 2019 in order to resolve years-long bribery and corruption investigations spanning across Djibouti, China, Vietnam, Indonesia and Kuwait.

Court documents indicate Ericsson violated the Foreign Corrupt Practices Act through a sustained effort to commit bribery, falsify books and records and improperly implement internal accounting controls. As part of this illegal conduct, Ericsson utilized third-party agents and consultants to make payments to government officials in Djibouti, China, Indonesia, Kuwait and Vietnam as well as manage off-the-books slush funds. These individuals were often employed through false contracts with no proper accounting provided; furthermore their fees received were never properly accounted for within Ericsson's books and records.

According to a plea agreement, Ericsson will be found guilty on one count of conspiracy to violate the FCPA's anti-bribery provisions and another charge of violating internal control and books and records provisions. Furthermore, they must serve a term of probation until June 2024 while having their independent compliance monitor extended for one year, according to government statements.

Throughout the criminal investigation, Ericsson allegedly paid millions of dollars in bribes to foreign government officials. Employees in China organized for the distribution of tens of millions of dollars worth of slush funds to agents and consultants while an employee paid over $2 million dollars in bribes to government officials there.

Under the terms of its plea agreement, Ericsson will have to pay a criminal fine of $206,728,848, which will include any cooperation credits originally awarded under the deferred prosecution agreement. It must also pay prejudgment interest and extend its independent compliance monitor for one additional year.


Today, Ericsson pled guilty to a criminal charge that it breached an earlier agreement in which they agreed to pay over $1 billion to settle investigations into bribery allegations in Djibouti, China, Vietnam, Indonesia and Kuwait. Prosecutors' investigation uncovered how the company employed fake consultants to funnel hundreds of millions of dollars in payments to government officials for winning business from state-owned telecom companies.

According to the Justice Department, Ericsson employees in China between 2000 and 2016 caused tens of millions of dollars to be paid out to agents and consultants - at least some portion of which went toward funding a travel expense account for foreign officials, including customers from state-owned telecommunications companies. This enabled Ericsson to win business and maintain its competitive position within China's market place, according to DOJ findings.

In addition, the DOJ claimed Ericsson employees in Djibouti paid out $2 million in bribes to senior government officials within its executive branch and state-owned telecommunications company. This allowed the company to secure a contract worth approximately $182 million as well as improperly record a payment of $450,000 to a consulting firm on its books.

Furthermore, the DOJ claimed Ericsson used intermediaries to circumvent Iraqi Customs during a time when terrorist organizations such as ISIS controlled some transport routes. Furthermore, it failed to properly verify the identity of suppliers - an apparent breach of its internal financial controls.

As part of its settlement with the DOJ, the company agreed to cooperate in any ongoing investigations or prosecutions regarding the conduct; enhance its compliance program; and retain an independent monitor for three years. Moreover, any evidence or allegation of misconduct which might violate the Foreign Corrupt Practices Act will be disclosed to the DOJ.

Borje Ekholm, president and CEO of Ericsson, expressed his disappointment in the failures and pledged to work toward improving their compliance program. He pledged to prioritize leadership, culture, tone from the top; training and engagement; as well as making improvements to third-party risk management processes.


After violating the previous deal, Ericsson agreed to plead guilty and pay a $206 million fine. Furthermore, they will serve a probation term until June 2024 according to the Department of Justice. Furthermore, the Swedish 5G equipment maker also consented to an extension of one year for an independent compliance monitor, the agency noted.

This decision follows a controversy involving potential payments to the Islamic State group through its activities in Iraq. An investigation was conducted by the International Consortium of Investigative Journalists, which obtained confidential documents from Ericsson.

Following this revelation, there have been numerous legal and financial repercussions, such as the departure of its chief legal officer, investor lawsuits and terrorism victims' claims. Additionally, the company's share price has taken a severe hit.

Ericsson must continue its efforts to enhance its compliance frameworks and risk management controls. It must ensure these improvements become embedded in the company's operations.

In addition to these reforms, it will be essential for the company to have an in-depth knowledge of the law in each country where it operates. This way, they can ensure their policies adhere to applicable regulations and have sufficient resources for conducting thorough internal investigations.

Companies may want to consult financial crime specialists for guidance on the most appropriate course of action. A qualified lawyer can guarantee that a company's policies are understood by all employees, helping ensure compliance.

Depending on the circumstances, a probationary period may be beneficial to your company. They are an effective tool in progressive discipline and give you the chance to determine if an employee is suitable for your business.

They provide new hires with a short-term trial period to assess their suitability for the position and determine if further training or development is needed.

Probationary periods are an excellent opportunity to reward good employees and quickly correct any negative ones in the employment cycle. It is essential to remember that these times are legally binding and should not be seen as leniency.

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