Citigroup May Cut 3,000 Or More Jobs To Cut Costs
Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
By Candace Choi
NEW YORK (AP) -- Citigroup Inc. is the latest bank seeking to trim costs with a smaller work force.
The New York-based bank is considering cutting 3,000 or more workers, which would amount to about 1 percent of its work force worldwide. A person with knowledge of the situation said Wednesday that a decision on the timing and number of cuts hasn't been finalized, but that the reductions could exceed 3,000 in the next year or so.
About 900 of the cuts would be in the company's securities and banking division, which serves institutional clients. The rest would be spread throughout various departments.
The person, who wasn't authorized to speak publicly about the layoffs, said some employees have already been notified of the cuts. The person did not know how many of the potential cuts would in the United States.
Citi's investment banking division and trading in stock and bonds have been hurt by turmoil in financial markets, the bank said in October as it reported third-quarter results. Its North American consumer unit has also been hurt by new regulations that limited the ability of banks to raise interest rates on credit cards, hike fees for late payments and collect fees from merchants when customers swipe their debit cards.
The most recent layoff plan would also be an extension of the company's moves to shrink certain parts of its work force in recent years.
When CEO Vikram Pandit was first hired in 2007, the company had 375,000 employees. That number has been whittled down 30 percent to about 260,000, in part through the spinning off of units the company doesn't consider central to its business.
Citi, and other banks hurt by the financial meltdown in 2008 and the subsequent downturn, have been selling off "non-core" divisions. In June, for example, Citi sold a $1.7 billion private equity portfolio to a French bank.
Citigroup was one of the biggest recipients of taxpayer support during the financial crisis. It received $45 billion in bailouts funds and was partly owned by the government until December 2010.
While the company has been selling off some businesses, Pandit has focused on expansion in emerging markets. Citigroup's consumer banking unit has 4,600 branches around the world, with about 3,500 of them in emerging markets such as Asia and South America.
Citi isn't the only major bank cutting jobs as the financial industry gets leaner.
In September, Bank of America said it would cut 30,000 jobs over the next few years as part of an initiative to shrink and reduce expenses. The cuts represent 10 percent of the Charlotte, N.C., bank's work force. Bank of America said it expects the cuts and other measures will result in $5 billion in annual savings by 2014.
The possible job cuts by Citigroup were reported earlier by The New York Times and The Wall Street Journal.
Citi shares fell 39 cents, or 1.4 percent, to $27.63 in afternoon trading Wednesday.
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