Citigroup to cut 15000 jobs worldwide

Citigroup Inc. expects to have completed its corporate cost review by mid-April, company officials said Monday, as published reports suggested that the nation's largest bank was considering cutting about 15,000 jobs.

The Wall Street Journal said the job cuts - which would amount to about 5 percent of Citigroup's worldwide workforce - were part of the New York-based bank's restructuring plan, which was disclosed late last year and is aimed at improving the bank's financial performance.

Citigroup's chairman and CEO, Charles Prince, has come under heavy criticism from investors because expenses have been growing faster than revenue, reducing profits.

Prince, who is on a trip to India, told reporters there that he would not comment on the Journal's report.

"We are going to announce the results of our strategic structural review on or before our earnings announcement on April 16," he said.

Earlier, Citigroup spokesman Michael Hanretta declined to comment on the report, also saying results of the cost-cutting study would be made available "on or before earnings on April 16."

The review is being led by Chief Operating Officer Robert Druskin. The newspaper said Druskin would report his recommendations internally by the end of the week. It cited unidentified people familiar with the matter.

The newspaper said the cuts could result in a charge of more than $1 billion against earnings, the AP reports.

Operating expense rises were particularly high in Citigroup’s international consumer division — rising by 18 per cent to $11.2 billion last year — as the group spent heavily to boost its presence in Asia and Latin America.

The bank is scheduled to unveil its findings when it reports its first-quarter earnings on April 16, the day before its annual report comes out.

Citigroup’s cost issues hit the gossip columns in the United States in January when Todd Thomson, the group’s head of global wealth management, was ousted from his job. It emerged that Mr Thomson had left the group because Charles Prince, the chief executive, had viewed his ostentatious use of the company expense account to be inappropriate at a bank that had pledged to cut costs, reports.

Some of the reduction will be achieved by natural wastage and other jobs will be moved to lower-cost locations, including offshore, say insiders.

Mr Prince is expected to present the restructuring as an attempt to improve Citigroup's responsiveness to clients as much as a cost-cutting exercise.

Mr Prince blames Citigroup's cost problems partly on failure to integrate properly the acquisitions through which the group was constructed in the 1990s.

The group has tended to operate as a collection of "silos" without focusing on the opportunities to share costs, he argues.

However, significant savings have been made in recent years, reports.

Source: agencies

Prepared by Alexander Timoshik

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Author`s name Alex Naumov