Citigroup plans 17,000 job cuts

13.APR.07

America’s largest financial firm, Citigroup, has announced plans to cut 17,000 jobs, more than half overseas.

The cuts, which will reduce its 327,000-strong workforce by 5%, are part of efforts to reduce costs.{{more}}

Citigroup hopes to make savings of $2.1bn (£1bn) in 2007, rising to $4.6bn in 2009, in order to revive profits.

On top of the job cuts, 9,500 positions will be “moved to lower-cost locations, both domestically and internationally”, said chief executive Charles Prince.

The job cuts are designed to reduce Citigroup’s operating costs, which soared by 15% last year to $52bn, while its annual revenues rose just 7%.

Citigroup’s chief operating officer, Robert Druskin, who led the three-month review into how to trim costs, said most of the job cuts would be completed by the end of this year.

“We know where every head is coming from, we know where every dollar is coming from, and we’re ready to move into implementation mode literally today,” he said.

Citigroup, which is best known for its consumer banking arm Citibank, said it would be removing certain layers of management and eliminating some corporate offices.

It said that 57% of the planned 17,000 job cuts would take place internationally, and 43% within the US.

Citigroup employs 11,500 people in the UK, up to 9,000 of whom are based at its main London office in Canary Wharf.

It said that regarding its non-US operations, it was not revealing job cuts on country by country basis.

Banking analyst Joseph Dickerson of Atlantic Equities said it remained to be seen whether Citigroup was back on track.

“The key question is, are these expense savings going to make Citi better at innovation, which is key for growth?”