Citigroup Inc. has announced plans to reserve $600 million for severance payments in 2025 as part of its ongoing workforce reduction and cost-cutting measures. The figure, disclosed by Chief Financial Officer Mark Mason, represents a 14% decrease from the previous year, when the bank spent $700 million on severance costs after laying off more than 10,000 employees.

“Typically, severance costs hover around $300 million annually,” Mason noted, highlighting the elevated nature of the current restructuring efforts, reported Bloomberg. 

The New York-based bank is midway through a comprehensive reorganization that aims to eliminate approximately 20,000 jobs globally. This transformation, which has been underway for several years, is part of Citigroup’s strategy to streamline operations and improve efficiency.

Mason explained that investments in technology are a key component of the overhaul. These upgrades are expected to automate tasks and replace manual processes, thereby reducing the need for certain roles.

The latest round of severance allocations reflects Citigroup’s continued focus on balancing workforce adjustments with its long-term strategic goals. The bank’s efforts to modernize operations and embrace technological advancements come as the financial sector faces increasing pressure to adapt to evolving market dynamics.

Citigroup’s reorganization underscores the challenges and opportunities inherent in managing such a large-scale transformation. While the reduced severance allocation compared to last year may indicate a slowdown in layoffs, it still highlights the significant scope of changes being implemented.

Broader Industry Impact

Citigroup’s plans align with broader trends in the financial sector, where companies are increasingly turning to technology to drive efficiency and reduce costs. The reorganization serves as a case study in how major banks are navigating these shifts while managing the implications for their workforce.

As Citigroup continues to execute its strategy, the results of these changes will be closely watched by industry stakeholders.