Citigroup Inc, the largest US bank, plans further job cuts in its securities operations in a bid to cut costs after subprime mortgage and credit problems led to a record quarterly loss.Any job losses would be on top of 4,200 cuts companywide announced in January by Chief Executive Vikram Pandit, and 17,000 announced last April by predecessor Charles Prince. Citigroup has said it ended 2007 with 375,000 employees.
“Each year we identify the bottom 5% of performers in the institutional clients group, and some number of these people leave the firm,” spokesman Adam Castellani said on Thursday. “This year, we will have a larger number of reductions as we continue to strengthen the business and lower our expense base.”
The institutional clients group includes investment banking and trading operations, as well as alternative investments, which offers hedge fund and private equity services.
According to the New York Times, citing people close to the situation, Citigroup plans to lay off 2,000 investment bankers and traders before the end of March. Most cuts will be in New York and London, though other markets in Europe and Asia will be affected, the newspaper said. Traders are more at risk given market conditions, the newspaper said.
The bank declined to confirm the report. Published reports have said Citigroup might cut tens of thousands of jobs. Pandit has been reviewing the bank's businesses worldwide to explore ways to boost profitability and efficiency.
In the fourth quarter, New York-based Citigroup suffered a $9.83 billion loss, hurt by $18.1 billion of write-downs largely tied to subprime mortgages and related securities.
Speaking on a January 15 conference call discussing results, Chief Financial Officer Gary Crittenden called the 4,200 job cuts a “first installment” in what would likely be “a continual stream of efforts that we are making to reduce headcounts in nonproductive areas” and invest in stronger businesses.
Citigroup shares closed Wednesday at $20.41 on the New York Stock Exchange. They closed one year ago at $50.64. (Reuters)