More Job Cuts Expected at Citigroup in March. How Will This Affect C Stock and Its 2% Dividend Yield?

Major Banks Prepare for Earnings Amid Market Uncertainty

As investors await new signals from the Federal Reserve and upcoming inflation reports, attention is turning to the latest earnings from leading U.S. banks. This reporting period includes updates from industry giants such as JPMorgan Chase, Bank of America, Wells Fargo, and Citigroup, offering insight into how these institutions are adapting to tighter monetary policy and evolving lending conditions.

Citigroup’s Standout Performance

Among these financial heavyweights, Citigroup has captured particular attention. Over the past year, its share price has climbed nearly 43%, even as the company implements a significant restructuring plan. Management aims to reduce the workforce by 20,000 positions by the end of 2026, with approximately 1,000 jobs expected to be cut in the near term.

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With CEO Jane Fraser set to initiate another round of layoffs in March, investors are left to consider whether these aggressive changes will bolster Citigroup’s stock and its 2% dividend, or if they signal potential risks for future payouts and share value. Let’s take a closer look.

Assessing Citigroup’s Financial Strength During Restructuring

Headquartered in New York, Citigroup operates globally, offering a range of consumer, corporate, and investment banking services. The company holds approximately $203.2 billion in equity and provides an annual dividend of $2.40 per share, resulting in a yield of 2.08%.

As of January 28, Citigroup shares were priced at $113.67, reflecting a 43% increase over the past year, though the year-to-date return stands at -2.3%.

The market currently values Citigroup at 11.29 times forward earnings and 1.07 times book value, which is comparable to sector averages for earnings but represents a discount on book value relative to peers.

For the quarter ending December 25, Citigroup reported earnings per share of $1.81, surpassing the consensus estimate of $1.65 and delivering a 9.7% positive surprise. However, quarterly revenue reached $40.9 billion, marking a 6.81% decline as the bank continues to exit non-core operations and adjust its risk profile.

Net income for the period was $2.47 billion, but this figure represented a 34.14% year-over-year decrease, highlighting the impact of restructuring expenses, higher credit costs, and transformation initiatives on profitability. In terms of cash flow, Citigroup’s operating cash flow for December 2025 was approximately -$94.2 billion, despite a modest 1.15% increase in operating cash flow growth.

Ultimately, the company achieved a positive net cash flow of about $71.5 billion, with a 17.37% improvement compared to the previous period. Total assets reached nearly $2.66 trillion, up 0.56%, while total liabilities rose to around $2.44 trillion, up 0.61%. These figures indicate a sizable but stable balance sheet as management works to streamline operations and control costs.

Citigroup’s Strategic Moves and Restructuring Efforts

Citigroup’s ongoing workforce reductions are part of a broader strategy to reshape the organization for greater efficiency. The plan to cut approximately 20,000 jobs by 2026, including about 1,000 positions currently being eliminated, is central to CEO Jane Fraser’s vision for a leaner company.

Additionally, Citigroup has announced the full redemption of $2.5 billion in 1.122% Fixed Rate / Floating Rate Notes due in 2027. This redemption, scheduled for January 28, will be executed at the full principal amount plus any accrued interest up to the redemption date. After this date, interest will no longer accrue on these notes, effectively removing this debt from the company’s capital structure. This move is part of Citigroup’s broader liability management strategy, aimed at optimizing its debt profile and reducing costs.

Analyst Outlook for Citigroup Shares

Despite the ongoing restructuring, analysts remain optimistic about Citigroup’s earnings prospects. The next earnings report is expected on April 21, with consensus estimates for the current quarter’s earnings per share at $2.59, up from $1.96—a projected increase of 32.14%. Looking further ahead, full-year 2026 EPS is forecasted at $10.17, compared to $7.97 for the previous year, representing a 27.6% anticipated rise.

Market sentiment reflects this positive outlook, with 25 analysts assigning Citigroup a “Moderate Buy” consensus rating. The average 12-month price target is $131.58, suggesting a potential upside of roughly 16% from current levels.

Conclusion

Citigroup’s upcoming layoffs appear to be part of a calculated financial overhaul rather than an immediate threat to its 2% dividend. Ongoing cost reductions, improving earnings forecasts, and proactive balance sheet management all suggest the bank is positioning itself for stronger long-term performance. While the path forward may be uneven, the outlook remains positive as long as management continues to deliver on its transformation goals.