- Boise business entices customers to come break stuff — ‘recreational destruction’
- Fired Yahoo exec’s $60 million golden parachute may be a record
- Arkansas gynecologist snapped nude photos of patients, police say
- Anthony Weiner on his current sexting habits: ‘None of your business’
- Producers eye Capitol Hill for latest reality TV hit
- No selfie awareness: Obama, Biden mug for Instagram as Ukraine implodes
- Putin to Snowden: We don’t collect droves of data on everyone like the U.S.
- Clemson football’s new opponent: Atheists upset with player prayer, Bible study
- Toronto Mayor Rob Ford’s re-election launch party will be ‘history in the making,’ brother says
- Louisiana group hits back at Sen. Mary Landrieu campaign ad with ‘Actress Mary’ spot
Citigroup plans to cut 11,000 jobs
Investors cheer move; stock up 6%
NEW YORK — Citigroup said Wednesday that it will cut 11,000 jobs, a bold early move by new CEO Michael Corbat.
The cuts amount to about 4 percent of Citi’s workforce. The bulk of them, about 6,200 jobs, will come from Citi’s consumer banking unit, which handles everyday functions like branches and checking accounts.
Citi said that it will sell or scale back consumer operations in Pakistan, Paraguay, Romania, Turkey and Uruguay and focus on 150 cities around the world “that have the highest growth potential in consumer banking.”
The bank, the third-largest in the country by assets, did not say how many jobs it will cut in the United States.
About 1,900 job cuts will come from the institutional clients group, which includes the investment bank. The company will also cut jobs in technology and operations by using more automation and moving jobs to “lower-cost locations.”
Investors appeared to like the move. They sent Citi stock up more than 6 percent on a day when bank stocks were up 1.3 percent as a group. Citi stock closed at $36.46 Wednesday.
Job cuts are a familiar template in a banking industry still under the long shadow of the 2008 financial crisis.
Banks are searching for ways to make money as new regulations crimp some of their former revenue streams, like trading for their own profit or marketing credit cards to college students.
Customers are still nervous about borrowing money in an uncertain economy. And they are still filing lawsuits over industry practices like risky mortgage lending that helped cause the crisis.
Citi fared worse than others. It nearly collapsed, had to take two taxpayer-funded bailout loans, and became the poster child for banks that had grown too big and disorderly.
After a long stretch of empire-building, it has been shrinking for the past several years, shedding units and trying to find a business model that’s more streamlined and efficient.
Mr. Corbat became CEO in October after Vikram Pandit unexpectedly stepped down. Mr. Pandit had reportedly clashed with the board over the company’s strategy and its relationship with the government.
While the job cuts are among the first major moves by Mr. Corbat, they are in line with Mr. Pandit’s blueprint. Citi’s roster of 262,000 employees is down from 276,000 at this time in 2009.
Glenn Schorr, an analyst for the financial services company Nomura, said that the cuts announced Wednesday might be considered too light by analysts and investors. But he said they were “a step in the right direction” and noted “substantial” job and cost cuts the company has made over the past seven quarters.
Bank of America and Morgan Stanley have also shed jobs over that period.
TWT Video Picks
By John R. Bolton
Reality calls for attaching Gaza to Egypt and the West Bank to Jordan
- Removal of military gear limits options for U.S., NATO in Ukraine
- 'Culture of intimidation' seen in Nevada ranch standoff
- Joe Biden's first Instagram pic mocked as shill for sunglass ad
- IRS emails reveal discussion with Justice about suing nonprofits for election activities
- Rand and Ron Paul ride to the rescue for Bundy in Nevada standoff with feds
- Cliven Bundy's Nevada ranch wrecked by retreating feds
- CURL: The state of the Union worse than you thought
- BOLTON: A 'three-state solution' for Middle East peace
- PETA officials collide with deer
- CNN op-ed claims right-wingers 'more deadly than jihadists'
Top 10 handguns in the U.S.