Citigroup Inc chief executive Vikram Pandit will cut about 4,500 jobs in coming quarters as he seeks to reduce costs amid slumping revenue and “unprecedented” market conditions.
The lender will take a fourth-quarter pretax charge of about US$400 million tied to the reductions, including severance, Pandit said on Tuesday at an investors’ conference in New York. Citigroup, the third-biggest US bank by assets, employed about 267,000 people as of Sept. 30, according to a filing.
“Financial services faces an extremely challenging operating environment with an unprecedented combination of market uncertainty, sustained economic weakness in the developed economies and the most substantial regulatory changes we have seen in our lifetimes,” Pandit, 54, said. “These trends will likely significantly affect the competitive landscape in the coming years.”
Pandit is cutting staff as the European sovereign-debt crisis persists and banks prepare for regulations on minimum capital levels to take effect, threatening revenue from trading and investment banking. Citigroup said in September it would limit hiring to “critical” jobs to control costs.
Financial firms worldwide have cut more than 200,000 jobs this year, up from about 58,000 last year and 174,000 in 2009. Bank of America Corp CEO Brian Moynihan said the Charlotte, North Carolina-based lender plans to eliminate 30,000 jobs in the next few years.
“For the banking sector, both investment banking and commercial banking, the overhead expenses are too high,” Gerard Cassidy, an analyst at Royal Bank of Canada in Portland, Maine, said in a telephone interview. “The industry needs to do a better job bringing that expense level down to reflect the lower revenues vis-a-vis what they were two or three years ago.”
Pandit is investing in emerging markets, such as Brazil, China and India, which now account for more than half of the bank’s profit. Those economies may expand at 6 percent a year through 2015, eclipsing developed markets, which may grow less than 2 percent, Pandit said.
“Developed economies are undergoing a long period of deleveraging of consumer, financial, corporate and government balance sheets, which will drive slow growth for years,” Pandit said at the conference sponsored by Goldman Sachs Group Inc. “By contrast, emerging-markets growth is expected to continue, fueled by population growth, the rise of a powerful consumer base in the middle class and a growing share of world trade.”
Pandit didn’t say where the staff reductions would occur and Jon Diat, a bank spokesman, declined to specify which countries would see the steepest cuts. Pandit has cut more than 100,000 jobs since he became CEO in December 2007 through dismissals and sales of distressed assets and businesses from the New York-based lender’s Citi Holdings unit.
In related news, Deutsche Bank AG’s head of corporate finance coverage in Japan, Koichiro Yasuda, resigned as the German bank cut about 20 jobs in Tokyo, two people with knowledge of the matter said.
Deutsche Bank, based in Frankfurt, on Tuesday told investment banking staff in Tokyo, including at least three managing directors, that their positions were being eliminated, said the people, who declined to be identified as the matter is confidential. The global banking team in Japan employed about 70 people before the reductions, the people said.
Germany’s biggest lender plans to reduce its headcount by about 500 positions at its corporate banking and securities unit, primarily outside Germany, by March 31, the bank said on Oct. 4.
“The contagion from Europe is spreading to Japan and the rest of Asia,” said Katsunobu Komizo, chief executive officer at recruitment firm Executive Search Partners Co in Tokyo. “More job cuts are likely as Asia’s economy may be hurt when European banks stop lending and sell non-core business units.”
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day
Thousands of parents in Singapore are furious after a Cordlife Group Ltd (康盛人生集團), a major operator of cord blood banks in Asia, irreparably damaged their children’s samples through improper handling, with some now pursuing legal action. The ongoing case, one of the worst to hit the largely untested industry, has renewed concerns over companies marketing themselves to anxious parents with mostly unproven assurances. This has implications across the region, given Cordlife’s operations in Hong Kong, Macau, Indonesia, the Philippines and India. The parents paid for years to have their infants’ cord blood stored, with the understanding that the stem cells they contained