Citigroup To Cut 11,000 Jobs, Take $1 Billion Charge
In an announcement Wednesday morning, Citigroup announced it’s new money saving move. Considered one of the Big Four banks of America, Citigroup is planning to cut 11,000 jobs in order to lower expenses.
Citigroup did not specify how many jobs will be in the United States, as its network spans across 140 countries. Of the 11,000 positions to be removed, about 6,200 will come from Citigroup’s consumer banking unit, which handles everyday functions like branches and checking accounts. The New York Times reports that 2,600 jobs from the operations and technology group will be eliminated by using more automation and moving jobs to lower-cost locations. The final 1,900 jobs to be removed are from the institutional clients division. The cuts amount to about 4 percent of Citigroup’s workforce of 262,000.
Citigroup said that it will sell or scale back consumer operations in Pakistan, Paraguay, Romania, Turkey and Uruguay in order to focus on other world wide countries and cities with growth potential. 84 branches worldwide would be closed.
This business strategy comes after a shrewd power grab by the bank’s chairman, Michael E. O’Neill where he ousted the old CEO in order to put his hand-picked choice, Michael L. Corbat in power. The job cuts are among the first major moves by Corbat.
Explaining Citigroup’s plan, Corbat said:
“These actions are logical next steps in Citi’s transformation. 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.”
Citigroup expects the cuts to save $900 million next year, and slightly more in the following years. Which is good news, since the bank will take a pretax charge of roughly $1 billion in the fourth quarter and $100 million of related charges in the first half of 2013
2012 marks the company’s 200th anniversary.