Citigroup slashes up to 300 jobs

COUNTING HEADS::The US giant said its first-quarter trading revenue may echo JPMorgan’s disappointing results, as it continues its post-crisis pruning of staff

AFP and Reuters, NEW YORK and LONDON

Tue, Apr 15, 2014 - Page 15

US bank Citigroup Inc has cut between 200 and 300 additional jobs, most in the global markets business, the Wall Street Journal reported on Sunday.

Some of the employees were fired, while others left voluntarily. Among them was Steve Prince, the younger brother of former chief executive Charles Prince, according to the newspaper.

Steve Prince’s LinkedIn profile says he is a senior vice president for marketing and advertising.

The cuts account for about 2 percent of the global markets business, it added, citing a person familiar with the matter.

Citigroup refused to comment on the report.

“We continue to tightly manage expenses, making targeted headcount reductions in light of current market conditions,” spokeswoman Danielle Romero-Apsilos said in a statement.

“At the same time, we are adding some talent strategically, leveraging our unique global footprint to serve our clients,” the statement added.

The layoffs come as Citigroup cuts expenses in its business units as the banking industry adjusts to new regulation and loan demand.

On Friday last week, JPMorgan reported that trading revenue dropped 17 percent in the first quarter of the year, a trend Citigroup has said it could follow. Late last year, Citigroup had 251,000 employees, a far cry from its 323,000 employees in late 2008 at the height of the financial crisis.

Spurred into action by falling revenue, mounting losses and the need to convince regulators that they are no longer “too big to fail,” banks across the globe have radically constrained their staff levels since the 2008 collapse of US bank Lehman Brothers Holdings Inc sparked the financial crisis.

Last year, the tide of bad news began to turn for European banks, which are among the region’s largest employers. Across the continent, the 30 largest banks by market value cut staff by 80,000 last year, calculations based on their year-end statements showed.

Recruitment consultants say that workers’ hopes for a turnaround this year could be misplaced, which is bad news for countries like Spain where tens of thousands of bank layoffs have helped drive unemployment to 26 percent.

However, while painful for the people who have lost their jobs, the reduction of large banks’ workforces through a combination of asset sales and redundancies means banks will not have as big an effect on overall employment in future crises.

The most dramatic of last year’s job cuts came from major restructurings, such as Spain’s Bankia SA which shed 23 percent of its workforce to help meet the conditions of its 41 billion euro (US$56.9 billion) European rescue.

Italy’s Unicredit SpA, which reduced the highest number of staff, 8,490, said in its annual report that some of the reductions were the result of a project to outsource IT functions to joint ventures.

Belgium’s KBC Groep NV cited asset sales as a major reason for its 7,938 reduction in headcount, 22 percent of its workforce. Spain’s BBVA SA also cited asset sales as the driver of its 6,547 reduction in staff, or 23 percent of staff, which came in a year when the bank sold operations in Latin America.

At Bank of Ireland, where a 6.3 percent fall in staff was the fifth-largest in the region, a redundancy program was the main reason.

Routine streamlining continued last year. HSBC PLC, the biggest employer in the pack, cut headcount by 6,525, or 2.5 percent of its global total.

The pace of staff reductions approximately halved last year and most banks are now coming to the end of disposals and cutbacks agreed during the crisis.

However, upcoming EU-wide tests on whether banks need to hold bigger capital cushions could trigger another wave of asset sales and cuts.

Only three of the banks — Barclays PLC, Handelsbanken AB and Deutsche Bank AG — added jobs last year, and those totaled less than 770.

However, banks are hiring in a few areas, with some recruiters citing rises in specialist compliance roles such as anti-money laundering, cybersecurity and internal audit, as lenders have to deal with increasing demands from regulators determined to avoid a repeat of the crisis.