In a bold and shocking move by the new Citigroup CEO Michael Corbat, 11,000 staff will be sacked amounting to about 4% of the bank’s workforce becoming jobless, under its $1bn cost-cutting move.
Michael Corbat, who succeeded Vikram Pandit, has announced the job cuts as part of cost-cutting measures, which will see the sacking of 6,200 employees in the Citigroup’s consumer banking unit, which handles everyday functions like branches and checking accounts.
Citigroup also said that under its $1bn cost-cutting measures the bank’s consumer operations in Pakistan, Paraguay, Romania, Turkey and Uruguay will either be scaled back or sold, as the company intends to focus its presence on 150 cities across the globe “that have the highest growth potential in consumer banking.”
Citigroup job cuts will also affect in Brazil and Hong Kong operations and the bank has also announced closure of branches in Hungary, Korea, and the US. From Citigroup’s institutional clients group, 1,900 job cuts will occur. The group’s technology and operations jobs will also be cut by using more automation and shifting jobs to “lower-cost locations.”
The strategic move, which is likely to save $900 million in expenses throughout all Citigroup’s businesses across the world, has been welcomed by the investors as Citigroup stocks rose $2.17, or 6.3%, to close at $36.46 on Wednesday.
Citigroup fared worse than other counterparts in the recent past falling prey to the uncertain economy. The bank was saved by two taxpayer-funded bailout loans recently. For the past several years, Citigroup has been struggling to regain its foothold by shedding units and trying to find a business model that’s more streamlined and efficient.