Citicorp, the nation’s biggest banking group, said Wednesday that it will cut 400 workers from its North American investment bank, the latest in the wave of big staff reductions at major financial institutions.
The staff reductions, which equal 16% of the section’s employees, follows the announcement in November of planned worker cutbacks at Citicorp’s consumer banking division. One thousand jobs are to be eliminated there, mostly in the New York area through consolidation of marketing operations.
Citicorp would not detail which investment bank jobs or areas will be trimmed during the next few months. None of the 400 staff cuts will be from the 1,500- to 2,000-person investment banking work force in London, the spokesman said. He declined comment on expense trimming efforts there.
However, industry sources and analysts have said that salaries and bonuses at Citicorp’s London office have been frozen and that similar 16% cutbacks can be expected in investment banking operations there. That would amount to about 250 jobs, industry sources said.
Alan Macdonald, head of the investment bank, said in a memo to the staff: “We are fully committed to all our businesses. We will continue to emphasize those in which we have product strength, marketing position and can realize strong profits.”
The investment bank, one of several major divisions at Citicorp, deals in corporate takeover business, foreign exchange markets, insurance, trusts and other areas.
Many banks and Wall Street securities houses have been cutting staff in recent months, especially since the October stock market collapse that dramatically signaled the end of a five-year bull market during which the ranks of financial institutions had swelled.
Salomon Inc. laid off 800 people about a week before the crash, while Kidder Peabody Group trimmed 100 from its payroll one day later. L. F. Rothschild fired 150 employees after the crash, Goldman Sachs cut an estimated 300 people.
Chemical Bank is cutting 10% of its employees.
In a separate statement Wednesday, Merrill Lynch & Co. said it has begun laying off data processing workers at a Somerset, N.J., facility as part of a previously announced drive to reduce overall wage and salary outlays by 10%.