Citigroup to slash 11,000 jobs
It's not necessarily a surprise that Citigroup has announced a renewed effort to cut costs, in the form of 11,000 layoffs, of 4 percent of the current work staff.
About 6,200 positions will be cut from Citi's global consumer banking businesses, with about 40 percent of those layoffs coming in the back-office operations and technology areas. The costs will be immense, totaling $1 billion in the fourth quarter. The savings, however, should start $1 billion annually starting in 2014.
The aggressive moves had been pitched as CEO Michael Corbat's bid to quickly put his stamp on the company after taking over for deposed CEO Vikram Pandit. But inevitably you have to wonder if this is really Michael O'Neill putting his stamp on the bank. It was not secret that O'Neill was at one point in the running to lead Citigroup. Corbat was his hand-picked successor.
O'Neill's plans, according to the New York Times, "typically involve ruthless cost-cutting, often resulting in bank branches being closed. In its announcement on Wednesday, the bank said 84 branches worldwide would be closed…When Mr. O'Neill joined the board in 2009, he was intent on reducing costs in the bank's vast operations. Mr. O'Neill has had practice turning around an underperforming bank, having steered Bank of Hawaii to profitability earlier in his career."
If the expense reductions succeed in getting the stock price moving higher, no one will care. But if the bank continues to list, we might hear a little more about leadership in general.
- here's an article from FOX Business
- here's the Times article