Citigroup to cut 11,000 jobs, trim operations
06 December 2012
Determined to cut costs and appease investors, Citigroup Inc plans to cut 11,000 jobs or about 4 per cent of the bank's worldwide workforce, close 84 branches, and retreat from consumer banking in a handful of countries, its chief executive officer Michael L Corbatt announced on Wednesday.
The moves are said to bear the imprint of bank chairman Michael O'Neill, who abruptly deposed Vikram S Pandit as chief executive and replaced him with Corbat in a boardroom coup in October (See: Vikram Pandit quits Citigroup; Michael Corbat appointed new CEO. and Vikram Pandit's ouster from Citi a 'boardroom coup')
Citigroup's announcement underscores the major contraction in the world's third largest bank by assets since nearly collapsing during the financial crisis in 2007-08, and its continuing battle against high operating costs and persistently sluggish markets.
The cuts at Citigroup, many coming from its global consumer banking business, reflect a new emphasis on aiming at cutting commercial banking jobs rather than mainly eliminating investment banking positions.
With pressure mounting from shareholders, Citi has been trying to bolster returns, in part by working through a glut of bad loans and systematically dismantling some businesses. The job cuts will bring the company's head count down to about 250,000, down by a third since before the financial crisis.
The bank's shares rose more than 6 per cent on Wednesday.