Citigroup to slash 11,000 jobs worldwide
New York: In a major restructuring exercise, global banking giant Citigroup on Wednesday announced that it will cut 11,000 jobs worldwide to save nearly USD 1.1 billion in expenses annually from 2014.
The repositioning exercise comes two months after bank's former India-born CEO Vikram Pandit left the company unceremoniously
The restructuring would result in a "reduction of more than 11,000 positions," a statement by Citi said, adding that "these actions are logical next steps in Citi's transformation."
"While we are committed to - and our strategy continues to leverage - our unparallelled global network and footprint, we have identified areas and products where our scale does not provide for meaningful returns.
And we will further increase our operating efficiency by reducing excess capacity and expenses, whether they centre on technology, real estate or simplifying our operations," Citi's Chief Executive Officer Michael Corbat said.
Citi said the repositioning would generate 900 million dollars of expense savings in 2013.
The annual savings will exceed 1.1 billion dollars annually beginning in 2014, it added.
Citi also expects the repositioning actions to have a negative impact on annual revenues of less than 300 million dollars.
Citi said the repositioning efforts are aimed at reducing expenses and improving efficiency across the company.
About 1,900 positions would be eliminated in Citi's Institutional Clients Group.
More than half of these jobs are in the operations and technology functions that support the business.
Citi added that the actions are designed to streamline its client coverage model in banking and improve overall productivity in the markets business, especially in areas that have been experiencing continued low profitability such as cash equities.
Another 35 percent of the fourth quarter repositioning charges are expected to be incurred in Global Consumer Banking group, resulting in a reduction of 6,200 positions.
As a result, Citi said it expects to either sell or significantly scale back consumer operations in Pakistan, Paraguay, Romania, Turkey and Uruguay.
Citi would instead focus on the 150 cities that have the highest growth potential in consumer banking and concentrate its presence in major metropolitan areas.
The markets affected by the reductions include Brazil (14 branches), Hong Kong (7), Hungary (4), Korea (15) and the United States (44).
It would however continue to invest in its franchises in these countries.
After this repositioning, Citi will have more than 4,000 retail branches around the world and all of the five countries above would continue to be served by its institutional businesses.
Citi Holdings is expected to eliminate approximately 350 positions, concentrated mostly in Greece and Spain, and incur approximately five percent of the repositioning charges.
About 25 percent of the repositioning charges are expected to be incurred in the corporate sector with approximately 2,300 positions that support corporate services, real estate, and Citi Holdings to be deducted.
Another 300 global functions positions would be eliminated as a result of efficiency savings.
"Citi has come a long way over the past several years.... We have shed hundreds of billions in assets and businesses that are not core to our strategy. We will continue to seek ways to optimise the execution of our strategy to better serve our clients and deliver results for all of our stakeholders," Corbat said.
Citi, which had to depend on government bailout money to navigate the financial crisis, had rejigged its top management in October that saw Pandit leaving the company.
Pandit was credited with steering the company through the financial crisis but he resigned from his positions in the wake of reported differences with the board.
Citigroup last month had said that it would pay Pandit USD 6.6 million in incentive awards for 2012.