- Reductions are part of Corbat's efforts to restructure firm
- Bank said to have already held discussions with some workers
Citigroup Inc. plans to cut at least 2,000 jobs starting next month as Chief Executive Officer Michael Corbat restructures some of the bank’s businesses.
The substantial portion will be in middle or back-office positions, according to a person briefed on the plans, who asked not to be identified discussing personnel matters. The reductions are part of a repositioning the firm announced this month and will occur across the New York-based lender’s global footprint, people familiar with the matter said.
Citigroup, which had 239,000 workers at the end of September, has already held discussions with some affected employees, said one of the people, who declined to provide specifics on the businesses targeted.
Employees in the institutional business, which houses the trading and investment-banking operations, will be among those dismissed, one of the people said. Cuts in that unit will be more in line with annual performance-based dismissals that Wall Street firms employ to maintain competitiveness and adjust businesses to shifting markets, the person said.
Three years after taking over as CEO, Corbat is still finding areas to trim in a firm that boasted 374,000 employees before the financial crisis forced a government bailout. The bank will take a charge of about $300 million in the fourth quarter to help “resize our infrastructure and our capacity to deal with the continuing low-revenue environment,” Chief Financial Officer John Gerspach said Dec. 9 at an investor conference in New York.
Mark Costiglio, a company spokesman, declined to comment.
The $300 million charge compares with a $655 million expense taken in last year’s fourth quarter. For the year, restructuring charges will total $458 million, the lowest annual amount since 2010, according to data compiled by Bloomberg.
Other U.S. banks also plan to reduce staff. Morgan Stanley will take about a $150 million charge in the fourth quarter to cover severance costs of cutting 1,200 workers worldwide, including about 470 traders and salespeople in its fixed-income and commodities business, a person briefed on the matter told Bloomberg this month. That amounts to 25 percent of Morgan Stanley’s fixed-income trading staff, with other reductions coming in infrastructure and support roles, according to the person.
Morgan Stanley’s equities-trading unit plans to cut as much as 5 percent of its staff in an annual performance-based cull, the Wall Street Journal reported, citing people unidentified people familiar with the matter.