Citigroup jobs cut announced, over 11,000 employees affected, expects $1.1 billion annual savings

By on Dec 5, 2012 in Asia, Business, Europe, Finance, United States Comments

Citigroup, an American multinational financial services corporation with headquarters located in Manhattan, New York City, New York, announced today, Wednesday, December 05, 2012 its plan to cut jobs that will affect over 11,000 employees, and expects an annual savings of more than $1.1 billion beginning 2014.

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According to a press release by Citigroup on its official website this Wednesday, a series of repositioning actions will be made by the company that is being expected to lessen their expenses, without compromising their services to customers, particularly in the emerging markets.

As noted in the announcement, approximately 1,900 jobs will be eliminated from the Institutional Clients Group (ICG), around 6,200 jobs cut will be coming from the Global Consumer Banking (GCB), and the rest will be from the Operations & Technology functions that support the business.

“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 CEO Michael L. Corbat was quoted in the report.

“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.” Corbat, 52, added, who became the company CEO last October, after Vikram Pandit abruptly resigned from the post.

Citi has come a long way over the past several years. We have been consistently profitable; our capital strength is among the highest in the industry; and we have shed hundreds of billions in assets and businesses that are not core to our strategy.” Corbat explains further.

Apparently, Citi said it expects take a pretax charge of around $1 billion for the job cuts in the fourth quarter of 2012 and roughly $100 million of related charges in the first half of 2013, noting that the adjustment may cause $900 million savings in 2013 results and an annual savings of over $1.1 billion starting 2014.

Citigroup, which notably has the world’s largest financial services network, servicing 140 countries with around 16,000 global offices, noted that the cost reduction plan may affect markets in Brazil (14 branches), Hong Kong (7), Hungary (4), Korea (15), and the United States (44).

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