Citigroup to cut 24,000 jobs as sub-prime woes increase

by Gill Montia

Story link: Citigroup to cut 24,000 jobs as sub-prime woes increase

Citigroup, the world’s largest bank, is reported to be on the verge of cutting 24,000 jobs, amid rumours that the Chinese Government has withdrawn from negotiations to inject around £1 billion into the bank.

The job losses, which could represent up to 8% of Citigroup’s 300,000 headcount, have been reported by CNBC, the US news network.

Discussions with the state-owned China Development Bank have been active for a number of weeks but have now apparently been dropped.

However, a multibillion-dollar injection of cash is still on the cards, from a consortium of Asian and Middle Eastern investors.

The bank has already recorded billions of dollars of losses from investments in sub-prime mortgages and is expected to announce further sub-prime losses today, with some analysts suggesting they could amount to as much as $24 billion for the fourth quarter of 2007.

Despite its woes and the prospect of large-scale redundancies, Citigroup has created a new position to oversee the sensitivities of its most valued executives.

Paul McKinnon, a former senior vice-president of human resources at Dell, has been appointed Head of Talent and will take up the post at the beginning of February.