New Citigroup CEO announces 11,000 job cuts

US banking giant Citigroup’s new chief executive on Wednesday announced a cut of four per cent of its global workforce, less than two months after a shock board move forced out CEO Vikram Pandit.

Michael Corbat, who took the lead of the mega-bank on October 16, said it would slice more than 11,000 jobs, mostly in its global consumer banking division, and take a $US1 billion charge in the 2012 fourth quarter and another $US100 million in the first half of next year.

Investors welcomed the news: the shares gained 6.5 per cent to $US36.50 in early afternoon trade.

Citigroup said it would “significantly” scale back operations in Pakistan, Turkey, Paraguay, Uruguay and Romania.

Other markets affected by the cuts include the United States, Brazil, Hong Kong, South Korea, and Hungary.

Around 6,200 of the job losses will be in the consumer banking division as Citi pushes a strategy of focusing on the 150 cities around the world “that have the highest growth potential in consumer banking.”

“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,” said Corbat.

“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.”

AFP

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