New York: US banking powerhouse Citigroup on 11 April 2007 announced 17,000 mass job cuts as part of a global putsch by top executives to overhaul its operations and save several billion dollars in costs.
Citigroup, one of the world’s biggest financial firms, said more than 26,500 staff would be impacted by its overhaul, however, as it also plans to move over 9,500 jobs to “lower-cost locations” in the United States and overseas.
The New York-based banking titan has come under public pressure from shareholders to slash spending and it unveiled the job losses after a three-month review of its business.
“Ultimately, these changes will streamline Citi and make us leaner, more efficient, and better able to take advantage of high revenue opportunities,” said Citigroup chairman and chief executive Charles Prince.
Citigroup, which has expanded aggressively in the last decade, employs some 3,27,000 staff worldwide and the layoffs will affect over 5% of its workforce.
Expenses have ballooned in the past year partly as Citigroup has raced to open hundreds of new bank branches in the US and overseas while seeking to fend off fierce domestic competition from arch-rival Bank of America.
Senior executives said the job cuts will help generate cost savings of $2.1 billion(Rs 8700 crore)in 2007, $3.7 billion in 2008, and $4.6 billion in 2009.
Prince and other top executives told Wall Street analysts on a conference call that further reforms could be announced in coming months as they vie to nail down spending.
Citigroup’s CEO promised to make cost cuts a top priority after the bank’s fourth quarter profits slowed and following a reported call from leading shareholder, Saudi Prince Alwaleed bin Talal, for “draconian” steps to tackle costs.
Citigroup still booked $5.13 billion in net profits for the last three months of 2006, more than the combined earnings of Merrill Lynch, Apple and American Airlines.