New York: Citigroup has long carried the mantle as the world's biggest bank in the world's financial capital -- big deals, big ambitions and in the last few years, big costs.
With expenses growing nearly twice as fast as revenue, Citigroup on 11 April said it would shed 17,000 jobs and move 9,500 others.
With shareholders impatient with Citigroup's sluggish stock price, the job cuts will put its chief executive, Charles O. Prince III, to the test.
In New York City, where Citigroup is the largest private employer and has 27,000 employees and its headquarters, about 1,600 jobs will be eliminated.
An additional 200 jobs will be lost in New York state, about 75 jobs will be cut in Connecticut, and a handful will be shed in New Jersey.
Overall, roughly 8% of Citigroup's 327,000 workers worldwide, from entry-level consumer bankers to senior executives in the investment bank, will be affected.
The 17,000 jobs will be eliminated this year. About 9,500 positions will be moved overseas to places like India or Poland, or smaller U.S. cities like Buffalo, N.Y., where the cost of doing business is lower. Two-thirds of those jobs will be lost through attrition. Another round of cost-cutting may still be in the offing.
“We are initiating a change in how we run the business," Prince said on 11 April. “You will see a more efficient, more tightly managed, and more tough-minded Citigroup than you have in the past."
The plan outlined Citigroup's first major overhaul since the merger of Travellers and Citibank forged the banking giant in 2008.
Amid a slump in financial shares, Citigroup's stock fell 1.15% on Wednesday, to $51.80 (Rs2,221). Since Prince took over as chief executive in October 2003, the company's share price has barely budged.
Investors and analysts had been expecting the project to reduce operating expenses by at least $2 billion, including $400 million of previously announced expense reductions from technology improvements.
Jason Goldberg, a banking analyst with Lehman Brothers, said that "2007 is a pivotal year; it just takes a long time to turn an oil tanker."