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WORLD> America
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Citigroup to cut 10 percent of jobs: source
(Agencies)
Updated: 2008-11-15 19:48 NEW YORK -- Citigroup Inc plans to shed about 10 percent of its global workforce, a person familiar with the matter said Friday, as the bank tries to return to profitability and faces mounting criticism of Chief Executive Vikram Pandit.
The cuts could result in a loss of roughly 35,000 jobs, based on the bank's reported 352,000-person workforce as of Sept 30. The cuts will be on top of the 23,000 jobs Citigroup has already slashed this year. Additional reductions would come from layoffs, the sale of units and attrition, said the person. Citigroup spokesman Michael Hanretta declined to comment. Pandit in a memo said he will host a "town hall" meeting for employees on November 17 at 8 a.m. EST (1300 GMT), at which he plans to discuss the bank's plans, including "the money we spend." Since replacing Charles Prince as chief executive in December, Pandit has made cost-cutting a top priority and has announced plans to shed $400 billion of assets. He has, however, faced growing and sometimes withering criticism from investors and others for failing to implement a workable turnaround plan for New York-based Citigroup. This week, the bank's shares fell below $10 for the first time since Sanford "Sandy" Weill in 1998 created Citigroup from the merger of Travelers Group Inc with Citicorp. The bank's shares closed up 7 cents at $9.52 in New York Stock Exchange trading, making it one of only two components of the Dow Jones industrial average to gain on a day when US stocks suffered broad declines. Earlier in the day, the stock dropped to $8.80 and has now lost more than two-thirds of its value from $29.44 at the beginning of the year. Citigroup's market value is only about $52 billion, barely twice the $25 billion of capital it received from the US Treasury Department's new bank bailout plan. "The current strategy has been in place for more than a decade," said William Smith, chief executive of Smith Asset Management Inc in New York, which owns Citigroup stock. "I don't know how many more quarters we have to go through this." Tough Road Ahead Like many rivals, the second-largest US bank by assets faces growing credit losses now that many economies worldwide appear to be in recession. |
