Citigroup announced Wednesday that it will cut more than 11,000 jobs, scale back operations in some emerging markets and take a $1 billion charge this quarter in an effort to drive down costs.
The New York Times
Under the reduction, 1,900 jobs will be eliminated in the institutional clients division. Another 6,200 positions will be removed from the banks consumer banking business, along with 2,600 jobs in the operations and technology group.
A CitiGroup spokesman said the cutbacks would affect roughly 5 percent of its 6,000 Missouri employees, or about 300 workers. The company has no significant Kansas operations.
The cuts would come in the companys operations and technology employment rather than in its branches or investment banking jobs.
The spokesman would not say specifically whether the cutbacks would touch the Kansas City credit card center, where employment has exceeded 2,000. The center is near Kansas City International Airport.
The reductions at Citigroup come after the banks chairman, Michael E. ONeill, engineered the ouster of its former chief executive, Vikram S. Pandit, and named a handpicked successor, Michael L. Corbat.
Since the power change in October, which stunned Wall Street, there has been unease throughout the upper ranks of Citigroup.
Earlier this week, Corbat briefed the board about the job cuts.
These actions are logical next steps in Citis transformation, Corbat said in a statement. While we are committed to and our strategy continues to leverage our unparalleled global network and footprint, we have identified areas and products where our scale does not provide for meaningful returns.
The bank said it would take a pretax charge of roughly $1 billion in the fourth quarter and $100 million of related charges in the first half of 2013. In the third quarter, Citigroup reported a profit of $468 million, or 15 cents a share.
Shares in Citi closed Wednesday up 6.3 percent to $36.46.
Citigroup has had a turbulent recent history, after teetering on the brink of collapse during the financial crisis and receiving a $45 billion lifeline from the federal government. Since emerging from the financial crisis, it has been sharply reducing its expenses and trying to shed even more troubled assets in an effort to restore the bank to its past profitability.
But those efforts have been dogged by missteps and turmoil. In March, for example, the Federal Reserve dealt a stunning blow to Citigroup when it scuttled the banks plans to raise its dividend or increase share buybacks. Shortly afterward in April, the banks shareholders, in a rare move, voted against a $15 million pay package for Pandit.
Executives at Citigroup are still struggling to rein in the banks business and work through a mass of bad assets in its Citi Holdings unit.
The Stars Mark Davis contributed.