Nearly two months after Citigroup CEO Vikram Pandit was basically ousted, the banking conglomerate announced that it would be cutting its workforce by 11,000 jobs, or 4%. According to the Wall Street Journal, "The New York company said the reductions will save $900 million next year and $1.1 billion annually starting in 2014, while reducing annual revenue by just $300 million or so." And what's more, it'll take a $1 billion charge for the fourth quarter.
Pandit's abrupt resignation was forced by Chairman Michael O'Neill; in late October, the NY Times reported that Pandit, who had been basking in praise about a good earnings report, went to O'Neill's office, where he "was told three news releases were ready. One stated that Mr. Pandit had resigned, effective immediately. Another that he would resign, effective at the end of the year. The third release stated Mr. Pandit had been fired without cause. The choice was his."
Pandit was replaced by Michael Corbat. Now the Times reports, "Since the power change in October, which stunned Wall Street, there has been unease throughout the upper ranks of Citigroup, according to the people. Some within the executive ranks have been worried that Mr. O’Neill, acting through Mr. Corbat, would quickly pare down the bank." Corbat said today, "These actions are logical next steps in Citi’s transformation."
Of the cuts, 6,200 jobs in consumer banking will be eliminated, while 1,900 jobs in institutional clients division and 2,600 and operations and technology will be cut. About 1,700 jobs will be gone in the NYC area, which is 8% of the Citi's NYC workforce, and 44 branches in the U.S. will be closed.
