Citigroup to Cut 3,000 Jobs
Citigroup Inc., the world’s biggest financial company, said Tuesday that it will slash an additional 3,000 jobs over the next 12 months, or about 1% of its work force, as the slack U.S. economy eats into profit growth.
The company, which runs banking, insurance and brokerage operations in more than 100 countries, said in a filing with the Securities and Exchange Commission that about 2,150 of the job cuts will be in the United States.
The cuts follow a prolonged, damaging slowdown in global financial markets and a challenging year for Citigroup.
Most of the world’s major investment and commercial banks, from American Express Co. to J.P. Morgan Chase & Co., have fired thousands of workers after sharp losses in Wall Street businesses such as trading, investing and advising companies on new stock offerings and merger deals.
“Given the slowdown in the brokerage business, it’s not surprising,” Credit Suisse First Boston analyst Joan Solotar said of Citigroup’s layoffs. “It hasn’t been a great year in the sense of everything firing on all cylinders.”
Plus, Citigroup has been on a buying spree during the slowdown. The New York-based company spent $12.5 billion in cash and stock on buying Mexico’s second-largest banking group, Banacci, and also bought European American Bank and leading consumer lender Associates First Capital in the last year.
The latest round of cuts will bring Citigroup’s total job losses to more than 4,000 since the start of this year. The company, which employs about 250,000 people around the world, announced plans earlier this year to cut 1,200 jobs in its global corporate and investment banking operations. It also axed about 7,400 jobs last year.
Citigroup said the latest cuts will be across all business lines, but it could not provide a breakdown of how many jobs will be lost in its corporate and consumer units.
In the second quarter, Citigroup, which has a global presence in retail and investment banking, fund management, brokerage and insurance, reported earnings of $3.79 billion on an operating basis--a 13% increase from the previous year before charges.
Citigroup shares, down 3.8% so far this year, fell 38 cents to close at $48.75 on the New York Stock Exchange.
