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Citigroup to shed 53,000 more jobs

Citigroup Inc is shedding approximately 53,000 more employees in the coming quarters as the banking giant struggles to steady itself after suffering massive losses from deteriorating debt.

The New York-based bank, which has already reduced its assets by about 20 percent since the first quarter of the year, also plans to trim expenses by 19 percent next year from third-quarter levels, to US$50 billion.

The plans, posted on the company’s Web site, were discussed by CEO Vikram Pandit at the company’s town hall meeting with employees in New York on Monday.

The company said it was shrinking its work force by 20 percent from last year’s peak of 375,000. The company had already announced last month that it was eliminating about 22,000 jobs from that level.

About half of the expected work force reductions will come from business sales; Citigroup already announced that it was selling Citi Global Services and its German retail banking business, accounting for about 18,000 jobs. Citi is planning to sell other businesses, too, but has not announced them yet, a spokesman said.

The other half of the work force reductions will come from layoffs and attrition, the spokesman said.

The New York-based bank has posted four straight quarterly losses, including a loss of US$2.8 billion during the third quarter.

In an effort to instill confidence in the company, Citigroup emphasized in its presentation on Monday that its Tier 1 capital ratio, a measure of financial strength, is 10.4 percent after a US$25 billion investment from the government — part of the US$700 billion financial rescue package passed by the US Congress last month.

That ratio is higher than peers Bank of America Corp and Wells Fargo & Co, after their purchases of Merrill Lynch and Wachovia Corp.

Citigroup said that it had doubled reserves in a year to US$24 billion and that its revenues were stable.

The bank also said that it had lower exposure to US consumer mortgages than JPMorgan Chase & Co, Bank of America and Wells Fargo.

But the announcements were not met with enthusiasm from investors. Citigroup stock fell US$0.63, or 6.6 percent, to close at US$$8.89. The company’s shares have been trading at 13-year lows.

Shortly before the town hall meeting in New York, Citigroup chairman Win Bischoff said at a business forum in Dubai, United Arab Emirates, that it would be irresponsible for Citi and other companies not to look at staffing in the event of a prolonged economic downturn.

“What all of us have done — and perhaps injudiciously — we’ve added a lot of people over ... this very benign period,” Bischoff said.

“If there is a reversion to the mean ... those job losses will obviously fall particularly heavily on the financial sector,” Bischoff said. “Certainly they will fall particularly heavily on London and New York.”

A Citigroup spokesman said that while certain regions and businesses might have higher concentrations of job cuts, they would generally be across the entire company and around the world.

Bischoff did not rule out the likelihood that Citi’s leaders would go without bonuses this year — a move that would effectively amount to a substantial pay cut for the company’s executives.

“Watch this space,” he said when asked about lost bonuses.

On Sunday, Goldman Sachs Group Inc said that seven top executives, including chief executive Lloyd Blankfein, opted out of receiving cash or stock bonuses for this year amid the ongoing credit crisis.
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