By MATTHIAS RIEKER And SUZANNE KAPNER
Citigroup, under increasing pressure, said it will
eliminate 11,000 jobs, about 4% of its work force, and take a related $1 billion fourth-quarter charge..........
Biggest Corporate Layoffs of 2012 .........
Citigroup Inc.......set plans to cut 11,000 jobs in the giant bank's first major strategic shift since Michael
Corbat succeeded Vikram Pandit as chief executive in October.
The move...is the latest illustration of the immense pressure on big banks to take action in response to stagnant revenue and weak stock prices. The decision also shows the company's cost-cutting focus under Chairman Michael O'Neill......
More than half the cuts will take place in the company's global consumer-banking unit, where
Citigroup will close 84 branches around the world, including 44 in the U.S. ..... sell or substantially scale back consumer lending in Pakistan, Paraguay, Romania, Turkey and Uruguay.......
Citigroup also will cut 1,900 jobs in its securities and banking and transaction-services businesses..... 2,300 jobs in corporate services, real estate .......
The decision is the latest sign of banks slimming down amid soft economic growth, uneven markets and tough rules limiting bank profits. Citigroup shares have risen 35% this year but are down 26% since the end of 2010, amid a broad slowdown in markets businesses whose revival after the financial crisis helped bolster major bank stocks.
Of the six giant U.S. banking companies, only Wells Fargo.... shares trade above the company's reported book value, a measure of net worth...
The cuts stand to
make Citigroup, which before the financial crisis had by far the largest workforce among U.S. banks, the smallest of the big four U.S. commercial banks by employment, with around 250,000 workers. J.P. Morgan Chase......, Bank of America Corp......and Wells Fargo each had at least 259,000 employees at Sept. 30.
Citigroup said it would take a $1 billion fourth-quarter charge to cover the costs of the moves.
The sweeping cuts are Mr. Corbat's first stamp on the bank as CEO. Mr. Pandit, 55 years old, departed in October following a clash with the board over strategy and performance.....
Mr. Pandit's resignation came after a series of missteps this year left some directors feeling that the company wasn't being managed effectively and that the board wasn't kept adequately informed, according to those executives and advisers.
Citigroup shares dropped 89% over Mr. Pandit's tenure, and the company was hit this year by a shareholder revolt over executive pay, by the Federal Reserve's rejection of its plan to buy back stock
and by a $2.9 billion write-down of a brokerage joint venture with Morgan Stanley.......
Mr. Corbat had spent a significant part of his recent career at Citi shrinking the bank, particularly its consumer-lending businesses, and dumping derivatives tied to mortgages. Before being elevated to the CEO post, Mr. Corbat ran Citi Holdings.......
The news ....comes as
banks and securities firms scramble to tighten their belts to keep pace with shrinking revenue.... revenue likely will decline for the second consecutive year, dragged down by the lumbering economy and skittishness among many investors and borrowers. Barring a surprise turnaround, revenue is on pace to total $561 billion, down 7.2% from its 2010 peak.....
http://online.wsj.com/article/SB10001424127887323501404578161031803891150.html
