Citigroup has announced plans to cut 5% of its workforce – about 17,000 jobs – to reduce costs by 3.4 billion euros annually by 2009. The bank is trying to address the fact that its operating costs rose 15% last year while its revenue increased by just 7%. It currently employs 327,000 people worldwide.
Standard and Poors equity analyst Frank Braden said Citigroup had been buying other companies which has led to some duplication of jobs: “The company has made a number of strategic acquisitions and through the growth – especially internationally – you get a lot of redundancies and really the out come of these expense cuts have come from getting rid of those redundancies.”
Citigroup’s chief executive Charles Prince, who has been under pressure to raise the share price, said the changes will make the company leaner, more efficient, and better able to take advantage of high revenue opportunities.
About 57% of the job cuts will be outside the US. Citibank will close some offices, and move 9,500 workers from places like New York, London and Hong Kong to lower-cost locations.