Citigroup to slash 52,000 jobs

NEW YORK, USA: Citigroup Inc revealed plans to cut 52,000 jobs by early next year in a dramatic move to restore the No. 2 U.S. bank to health as it combats mounting debt losses and sagging economies worldwide.

The cuts announced by Chief Executive Vikram Pandit on Monday affect 15 percent of Citigroup's workforce, and are in addition to 23,000 jobs eliminated between January and September.

Citigroup plans to slash expenses by as much as 20 percent, and spend a total of $50 billion to $52 billion in 2009. That compares with $61.9 billion over the last four quarters.

The cuts will be global, affecting many regions and business lines, including the retail and investment banks, a person close to the matter said. About one-half will come from layoffs and attrition, and the rest from the sale of units, such as the German retail banking business.

Pandit became Citigroup's chief executive last December, and has faced much criticism from investors and others for failing to implement a workable turnaround plan. The New York-based bank has lost $20.3 billion in the last year, and some analysts do not expect it to make money before 2010.

"As the economy continues to weaken they will have greater credit losses," said Michael Holland, founder of money manager Holland & Co in New York. "Cuts will lessen the losses, but they in no way guarantee profitability."

Pandit told employees in a memo that Citigroup has spent the last year "getting fit," and projects a "difficult" 2009 for clients and customers.

Citigroup's latest cuts are the most by any U.S. company since the global credit crisis began last year. They are also the second most ever, trailing the 60,000 that International Business Machines Corp IBM announced in 1993, according to outplacement firm Challenger, Gray & Christmas Inc.

The latest cuts would leave Citigroup with about 300,000 employees, down 20 percent from the end of 2007 and about the same number it had at the end of 2005. People at the bank said the cuts should be made by the first couple of months of 2009.

Source: Agencies