Citigroup plans major job cuts

by Gill Montia

Story link: Citigroup plans major job cuts

Citigroup, the world’s largest bank, has plans to implement major job cuts before the end of the year.

It will be the second time this year that the bank has reduced staff in efforts to increase profitability and offset billions of dollars of losses in the US sub-prime mortgage crisis.

Details of the latest round of job cuts are being withheld until the group has appointed a new chief executive.

Any redundancy plan will need his or her approval but plans for widespread redundancies are being prepared in advance of the appointment.

News channel CNBC has reported that Citigroup is considering cutting up to 45,000 jobs.

This would follow the loss of 17,000 positions in April of this year and would represent a total cut in the workforce of nearly 14%.

Citigroup is currently seeking a replacement for Charles Prince, who resigned as chairman and chief executive earlier this month, after the bank wrote down $6.4 billion in sub-prime related losses, in the third-quarter.

The losses, together with the prospect of a further $11 billion in write downs in the fourth-quarter, were above earlier estimates, and Mr Prince was forced to stand down.

Citigroup has also undertaken a review of its investment banking business, relocating certain key roles to London.

The move has led to speculation that the financial services provider may be broken up; some investors already regard Citigroup’s range of retail and investment banking services as unfocused.