NEW YORK (Reuters)- Citigroup Inc said on Monday it plans to cut about 50,000 jobs assouring economies and global credit conditions cause the U.S. bank withthe farthest reach worldwide to retrench.
The cuts are expected in the near-term and are on top of the roughly23,000 jobs eliminated by the second-largest U.S. bank between Januaryand September. This would leave Citigroup with about 300,000 jobsworldwide, down 20 percent from the end of 2007.
Cuts are expected from layoffs, the sale of units and attrition.Citigroup plans to slash expenses 20 percent from peak levels and spend$50 billion to $52 billion in 2009, compared with $59.8 billion in 2007.
The cuts are Chief Executive Vikram Pandit’s most dramatic move yetto restore profitability and bolster a sagging share price. Last week,Citigroup stock fell into the single digits for the first time sinceSanford "Sandy" Weill created the bank in 1998 from the merger ofTravelers Group Inc and Citicorp.
Shares of Citigroup fell 18 cents to $9.34 in premarket trading.
Pandit became chief executive last December, and has faced muchcriticism from investors and others for failing to implement a workableturnaround plan for Citigroup.
The New York-based bank has lost more than $20 billion in the lastyear, hurt by bad bets on complex and risky debt, often tied tomortgages. Some analysts say the bank might not be profitable before2010.
Through Friday, shares of Citigroup had fallen 68 percent this year,leaving the bank with a market value of only $51.9 billion, barelytwice the $25 billion of capital it received from the U.S. TreasuryDepartment’s bank bailout plan.
Citigroup was built principally by Weill, who ceded control to Pandit’s predecessor, Charles Prince, in 2003.
Analysts believe Citigroup never invested enough in technology or to make the bank’s parts work well together.
Its geographic diversity, including operations in more than 100countries, is now also working against it as customers in suchcountries as Brazil, India and Mexico find it harder to keep up withtheir bills.
At the same time, Citigroup’s ability to grow at home is relativelylimited. Last month, Wells Fargo & Co derailed Citigroup’s attemptto buy Wachovia Corp and its $418.8 billion of deposits.
(Reporting by Jonathan Stempel; Editing by Steve Orlofsky and John Wallace)
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