Fri, Dec 07, 2012 - Page 15 News List

New Citigroup CEO sets 11,000 job cuts


A sign is seen in the window of a Citibank branch in New York on Wednesday. Citigroup has announced that it will cut 11,000 jobs worldwide.

Photo: EPA

US banking giant Citigroup’s new chief executive on Wednesday announced a cut of 4 percent of its global workforce, less than two months after a shock board move forced out CEO Vikram Pandit.

Michael Corbat, who took the lead of the mega-bank on Oct. 16, said it would slice more than 11,000 jobs, mostly in its global consumer banking division, and take a US$1 billion charge in the 2012 fourth quarter and another US$100 million in the first half of next year.

Investors welcomed the news: the shares gained 6.5 percent to US$36.50 in early afternoon trade.

Citigroup said it would “significantly” scale back operations in Pakistan, Turkey, Paraguay, Uruguay and Romania.

Other markets affected by the cuts include the US, Brazil, Hong Kong, South Korea, and Hungary.

Around 6,200 of the job losses will be in the consumer banking division as Citi pushes a strategy of focusing on the 150 cities around the world “that have the highest growth potential in consumer banking.”

“While we are committed to — and our strategy continues to leverage — our unparalleled global network and footprint, we have identified areas and products where our scale does not provide for meaningful returns,” Corbat said.

“And we will further increase our operating efficiency by reducing excess capacity and expenses, whether they center on technology, real estate or simplifying our operations,” he said.

The actions came seven weeks after Citi veteran Corbat was named to run the bank following the shock sacking of Pandit and Pandit’s top aide in an unexpected board move.

There has been no official explanation for the ouster, which came after Pandit led the bank for five years through the global financial crisis.

However, it followed a long run of shareholder disappointments and a sluggish recovery compared with other banks.

Geographically, 4,600 of the job losses will be in North America, 3,800 in the Europe-Middle East-Africa division, 2,100 in Latin America and 750 in Asia, a Citi spokesman said.

The timeframe was not clear.

“Some discussions have started already, but it is a process that will continue into next year,” the spokesman said.

“Citi has come a long way over the past several years. We have been consistently profitable; our capital strength is among the highest in the industry; and we have shed hundreds of billions in assets and businesses that are not core to our strategy,” Corbat said.

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