Citigroup Inc. (Citigroup) is a global diversified financial services holding company. The Company provides consumers, corporations, governments and institutions with a range of financial products and services. Citigroup operates through two primary business segments: Citicorp, consisting of its Regional Consumer Banking (RCB) businesses and Institutional Clients Group (ICG), and Citi Holdings, consisting of its Brokerage and Asset Management (BAM), Local Consumer Lending (LCL), and Special Asset Pool (SAP).
Citigroup to slash 11,000 jobs in cost cutting measures, shares rise
The company’s shares rose 3.70 per cent on the news as at about 10:55 a.m. EDT, trading at $35.56.
As a result of the cuts, Citigroup said it expects to record pre-tax charges of about $1 billion in the fourth quarter and roughly $100 million of related charges in the first half of 2013.
The company also said it expects to generate $900 million in savings in 2013 and that the cuts will have a negative impact on annual revenues of less than $300 million.
"These actions are logical next steps in Citi's transformation,” said CEO Michael Corbat, who took over as CEO in October after former chief Vikram Pandit and president and COO John P. Havens resigned from the company.
Corbat said the cuts come as part of the company’s strategy to identify areas and products that are not providing meaningful returns.
“And we will further increase our operating efficiency by reducing excess capacity and expenses, whether they center on technology, real estate or simplifying our operations,” he noted.
Once the cuts are complete, Citigroup will have more than 4,000 retail branches around the world. The company will eliminate jobs throughout its business units, including its institutional clients group, securities and banking and transaction services.
Citigroup said it will also cut positions in its operations and technology functions that support the business as it attempts to streamline its client coverage model in banking and improve overall productivity in the markets business - especially in areas experiencing continued low profitability such as cash equities.
The company said it expects to either sell or “significantly scale back” consumer operations in Pakistan, Paraguay, Romania, Turkey and Uruguay.
It will also close 14 branches in Brazil, seven in Hong Kong, four in Hungary, 15 in Korea and 44 branches in the U.S.
Roughly 350 positions will be cut in the Citi Holdings division of the company. The company said charges are related to branch rationalization in Greece and Spain.
Citigroup added that about 25 per cent of the announced repositioning charges are expected to be incurred in its corporate/other unit.
“Citi has come a long way over the past several years,” said Corbat. “We will continue to seek ways to optimize the execution of our strategy to better serve our clients and deliver results for all of our stakeholders.”
Citigroup currently has about 200 million customer accounts and does business in more than 160 countries and jurisdictions.
The company provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services, and wealth management.