11,000 jobs to go in Citi’s new efficiency drive

 
Tim Wallace
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THE FINANCIAL services sector took a new blow yesterday as Citi announced a restructuring plan that will see 11,000 jobs go by the end of next year – the first major decision under new chief executive Michael Corbat.

London will bear some of the losses. Citi employs roughly 10,000 staff in the capital, but declined to reveal how many will be chopped.

Jobs will be lost across the world, with 6,200 to go in global consumer banking, including staff in Pakistan, Paraguay, Romania, Turkey and Uruguay. Branches are being closed in countries including Brazil, Hong Kong, Hungary, and the US.

The institutional clients group will also shed staff, particularly in securities and banking and in transaction services.

Citi will take an up front hit of $1bn (£621m) in the fourth quarter and another $100m in the first half of next year, largely in redundancy pay.

But the bank hopes the move will save roughly $900m next year and $1.1bn per year from 2014 onwards.

Set against a hit to revenues of $300m per year, that should leave the bank more efficient in future.

“While we are committed to 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 centre on technology, real estate or simplifying our operations.”