Every day the list of companies implementing layoffs gets longer and longer. Yesterday another financial sector giant announced it would be reducing its workforce. Citigroup (NYSE:C) will lay off hundreds of workers across multiple divisions, including investment banking, operations and technology organization. This follows similar news from other Wall Street banks. Goldman Sachs (NYSE:GS) ended 2022 by announcing plans for 8% workforce reductions. In the same month, Morgan Stanley (NYSE:MS) reduced 2% of its staff across the globe. And two weeks ago, Bank of America (NYSE:BAC) followed a hiring pause with similar layoff news. Things don’t look great for the investment banking wing of the financial sector, but the Citigroup layoffs aren’t pushing shares down today.
Let’s dive deeper into what investors should be expecting from C stock and the rest of Wall Street.
The Citigroup Layoffs: A Closer Look
C stock has been highly volatile since 2023 began, but it has remained in the green. Over the past month, it has outperformed all three previously mentioned banks that have opted for job cuts. As noted, shares are rising today, making it clear that the market isn’t reacting poorly to the news of the Citigroup layoffs. On the contrary, all four investment banking stocks are up today. That may be because, as NPR reports, “On Wall Street, layoffs are a way of life.” This type of news may be familiar enough for Wall Street that markets don’t react too negatively.
It’s also worth noting that the Citigroup layoffs are relatively small-scale. According to Bloomberg, the company has a global workforce of 240,000, less than 1% of whom will be impacted by the job cuts. That means less than 2,400 workers will lose their jobs. As the outlet notes:
“The routine cuts are part of Citigroup’s normal business planning, the people said. There’s been no broad mandate for managers to cut staffers; instead, various divisions have been grappling with different reasons for the cuts.”
All this suggests that these layoffs won’t keep C stock or the broader financial sector down for too long. Stocks are already trending upward and may come back stronger than ever as Wall Street firms prioritize efficiency in their 2023 operations.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
