Citigroup Is Considering Plan To Cut About 15,000 Jobs

Monday, March 26th 2007, 7:56 am
By: News On 6

NEW YORK (AP) _ Citigroup Inc., the nation's largest bank, is considering cutting about 15,000 jobs, or nearly 5 percent of its work force, as part of a restructuring plan being developed to improve its financial performance, according to a report in Monday's edition of The Wall Street Journal.

Citigroup, which announced a cost-cutting review of operations last year, has come under heavy criticism from investors because its expenses grew faster than its revenue last year, reducing profits.

The newspaper report said that the review is being led by Chief Operating Officer Roger Druskin, who is set to report his recommendations internally by the end of the week. The newspaper cited unidentified people familiar with the matter.

Citigroup expects to disclose the cost-cutting plan by the time it reports first-quarter results on April 16, the day before the annual meeting, the Journal reported.

The newspaper said the cuts could result in a charge of more than $1 billion against earnings.

A call to a Citigroup spokeswoman before business hours on Monday was not immediately returned.

Charles Prince, the chairman and chief executive of Citigroup, told a company-sponsored financial services conference in late January that the New York-based bank still intended to grow by focusing on increasing its existing retail and commercial businesses rather than by acquiring other companies.

The Journal reported Monday that one possibility that Citigroup is considering is not replacing some of the 30,000 to 50,000 Citigroup employees who leave the company each year. The paper said that the cuts could slice through Citigroup's global banking empire. It employs about 327,000 people worldwide...

In January, Citigroup said it earned $5.13 billion, or $1.03 a share, in the October-December period, down 26 percent from $6.93 billion, or $1.37 a share, a year earlier when it had a $2 billion gain on the sale of Citi's asset management business to Legg Mason Inc.

Quarterly revenue rose to $23.83 billion, up from $20.78 billion in the same period in 2005. But while its revenue was up 15 percent, expenses rose an even greater 23 percent.

For the full year, profits totaled $21.54 billion, or $4.31 a share, down 12 percent from $24.6 billion, or $4.75 a share in 2005. Revenue was $89.6 billion for 2006, up from $83.6 billion in 2005.