Citigroup Inc.’s new CEO Michael Corbat announced the company will be making 11,000 job cuts worldwide and close 44 bank branches across the United States.
Corbat says that the job cuts and closures are part of a new initiative to trim costs, which spiraled out of control under the old CEO Vikram Pandit, who added staff in 2011 and increased costs across consumer and investment banking in a bid to expand after the 2008 financial crisis.
“We have identified areas and products where our scale does not provide for meaningful returns,” Corbat said in a statement issued by the company. “We will further increase our operating efficiency by reducing excess capacity and expenses.”
“These actions are logical next steps in Citi’s transformation,” said Corbat, who also announced that Citigroup will take a $1 billion pre-tax charge during the fourth quarter, and approximately $100 million in related charges during the first half of 2013 as part of the plan, which is expected to save $900 million in 2013 and more than $1.1 billion annually beginning in 2014.
The financial company will also close 40 additional branches in other countries such as, Pakistan, Paraguay, Romania and Uruguay, still leaving it with 4,000 total branches globally. The 11,000 job cuts will reduce Citi’s workforce by 4% and come mostly at the consumer banking level.
The latest job cut announcement adds to all major banks that have announced some 160,000 job cuts since early last year, according to a Reuters analysis in November.
Bank of America in September 2011 announced 30,000 layoffs as part of a plan to reduce annual expenses by $8 billion. That bank is also closing or selling 750 branches.