Citigroup slashes 11,000 jobs to save $1.1 billion
Citigroup cuts are first big move for new CEO Michael Corbat, as he moves to reorganize the struggling banking giant. Most of the Citigroup cuts are expected to come in global consumer banking.
Citigroup on Wednesday announced plans to cut 11,000 jobs and close branches in a restructuring effort that will result in a fourth-quarter charge of about $1.1 billion.
Citi said the cuts come as it attempts to further reduce expenses and improve efficiency. The bulk of the layoffs, some 6,200 positions, are expected to come from global consumer banking.
The company said it also expects to take $100 million of related charges in the first half of 2013.
Citigroup said it expects about $900 million in cost savings next year and annual expense savings of more than $1.1 billion beginning in 2014.
"These actions are logical next steps in Citi's transformation.While we are committed to — and our strategy continues to leverage — our unparalleled global network and footprint, we have identified areas and products where our scale does not provide for meaningful returns," Michael Corbat, Citi's chief executive officer, said in a statement.
"And we will further increase our operating efficiency by reducing excess capacity and expenses, whether they center on technology, real estate or simplifying our operations," he added.
Corbat -- a veteran of the bank's investment and commercial banking operations -- assumed the reins of the troubled mega bank in October. Analysts have widely expected him to begin shaking up operations at Citi, which continues to suffer from an overhang of troubles that are in part a legacy of the 2008 financial crisis.
After nearly collapsing during the financial meltdown, Citi has come under withering pressure from investors and critics. This summer, former CEO Sandy Weill called for an end to the financial supermarket concept he helped to pioneer while at Citi. Last month, a group of minority shareholders called for the bank to consider a more dramatic revamp, or an outright break up.
Shares of Citi were more than four percent higher after the announcement in early trading on the New York Stock Exchange.