Citigroup's new chief launches first salvo: cuts 11,000 jobs

Reuters

The job cuts are part of a restructuring that will reduce annual revenues by "less than 300 million dollars," the bank said.

The bank has been in a long slog to recover from the losses of the financial crisis, which asked multiple government bailouts. While hundreds of billions of dollars of troubled assets, analysts already impatient with her objects has long refusal to scale back costs enough to reduced demand for its services.

Analysts have been expecting dramatic steps since Corbat was brought in as CEO of Citigroup President Michael O'Neill. O'Neill is known in the banking sector for the reduction of the companies to eliminate companies that do not yield satisfactory deserve.

"Corbat has a limited window of opportunity here in which he his new CEO can make movements," said Nancy Bush, a bank analyst and a long time editor at SNL Financial. Having regard to the mandate that he has to act, she said, "you might as well get the shocking figures out first."

Still, Bush expects corbat will continue restructuring and cutting jobs for two years. "I look at this as the first cut," she said. "Corbat forever digging and looking for places to cut, and inevitably staff the bulk of that will be."

The job cuts announcement came a few hours before Citigroup Chief Financial Officer John Gerspach was scheduled to speak at noon at a major Conference of institutional investors in New York.

CONSUMER BANKING CUTS

Approximately 35 percent of the fourth quarter restructuring charges will be held in the global consumer banking unit, where 6,200 jobs will be cut, the bank said. About 40 percent of the layoffs will be in technology and operations areas.

The bank expects to sell or scale back consumer operations in Pakistan, Paraguay, Romania and Uruguay. If it stays focus on 150 high growth markets, they intend to throw 84 locations in five countries, is more than half of them in the United States.

After the restructuring, the bank will have 4,000 offices all over the world.

Bush said that the bank had a "stupid strategy" in the middle of the years 2000, then it was adding branches in areas such as Boston and the suburbs of New York. "They now need to go back and think about their entire domestic branch strategy, and international too," she said.

When Citigroup CEO's changed in October, said O'Neill would remain of the bank strategy executives of peel back to core activities operate more efficiently. The strategy has included emphasis on business in rapidly growing urban areas.

Of the announced restructuring costs, will be about 25 percent are held in the bank investment and corporate banking businesses, and 10 percent in transaction services. About 1,900 jobs should be cut from those areas, with more than half from operations and technology features that support for the companies.

A goal of the cuts would eliminate redundant coverage of relationships with business customers, long a source of inefficiency at Citigroup, where sometimes treat relationships with companies and multiple bankers pitch them loans, great advice, securities underwriting and other services.

The movements will "streamline our client coverage model," the bank said.

Another 25 percent of the costs are for the revision of business and various other functions. About 2,600 jobs are in corporate support services, global functions, real estate and the Citi Holdings portfolio of troubled assets the company shedding is eliminated.

The announcement did not say how or whether he wants to organise its executive team Corbat the position of chief operating officer, which was left open as John Harbors left with Pandit will fill.

Even before the move Citigroup had large banks some 160,000 jobs loss since early last year, according to a Reuters analysis announced in November. Among the largest: Bank of America in September 2011 announced 30,000 layoffs as part of a plan to annual costs by $ 8 billion. This bank is also close or sell 750 branches.

In October unveiled Swiss bank UBS plans to fire 10,000 staff and fixed-income business relax.

Citigroup announce job cuts and reduction of costs for years. In April 2007 the announced 17,000 job cuts, intended to help save $ 4.6 billion of annual expenditure in 2009.

In November 2008, as the financial crisis was in full flush, Pandit announced plans more than 50,000 jobs. Pandit said the bank was In December 2011 cut 4,500 positions, and said he aimed to cut costs by 3 to 5 percent per year.

Reuters

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