Citigroup plans to cut more than 11,000 jobs worldwide in the fourth quarter as it continues to reduce expenses and improve efficiency across the company.
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“These actions are logical next steps in Citi's transformation,” said Michael Corbat, Citi’s CEO. “While we are committed to -- and our strategy continues to leverage -- our unparalleled global network and footprint, we have identified areas and products where our scale does not provide for meaningful returns. And we will further increase our operating efficiency by reducing excess capacity and expenses, whether they center on technology, real estate or simplifying our operations.”
Due to this repositioning, Citi expects to record pre-tax charges of approximately $1 billion in the fourth quarter of 2012 and approximately $100 million of related charges in the first half of 2013. Citi currently expects that the repositioning will generate $900 million of expense savings benefitting 2013 results and that the annual expense savings will exceed $1.1 billion annually beginning in 2014.
Citi expects the repositioning activity to affect the following businesses and functions.
Approximately 25% of the repositioning charges are expected in Securities and Banking with another 10% in Transaction Services. The repositioning actions are expected to result in a reduction of approximately 1,900 positions, of which more than half are in the Operations & Technology functions that support the business.
Approximately 35% of the charges are expected to be incurred in Global Consumer Banking, resulting in a reduction of approximately 6,200 positions, of which approximately 40% are in the Operations & Technology functions that support the business. As a result of the repositioning actions, Citi expects to either sell or significantly scale back consumer operations in Pakistan, Paraguay, Romania, Turkey and Uruguay.
The bank said it will focus on the 150 cities that it says have the highest growth potential in consumer banking. The markets affected by the reductions include the United States (44) as well as Brazil (14 branches), Hong Kong (7), Hungary (4), Korea (15).
Citi Holdings is expected to eliminate approximately 350 positions and incur approximately 5% of the repositioning charges. Most of the repositioning charges are related to branch rationalization in Greece and Spain.
About 25% of the announced repositioning charges are expected to be incurred in corporate/other functions.
Closures & Downsizings
|Company||Address||City||State||Closure or Layoff||Layoffs||Impact Date|
|ProPark Inc.||260 Crown St.||New Haven||CT||Unknown||186||1/20/2013|
|Laurel Hill Healthcare||108 E.t Lake St.||Winsted||CT||Closure||117||1/14/2013|
|Pierce Manufacturing Inc.||1512 38th Ave. East||Bradenton||FL||Unknown||236||1/10/2013|
|Bechtel Power Corp., FP&L Turkey Point EPU Project||9760 SW 344th St.||Florida City||FL||Unknown||277||1/6/2013|
|ITW Consumer||2107 W. Blue Heron Blvd.||Riviera Beach||FL||Unknown||73||2/28/2013|
|Vertafore||7835 Woodland Drive||Indianapolis||IN||Layoff||23||1/31/2013|
|facadeTek||4485 S. Perry Worth Road||Whitestown||IN||Layoff||72||1/2/2013|
|Mercier's||7442 Shipley Ave.||Harmans||MD||Layoff||75||12/31/2012|
|Kraft Foods||2525 S. Bridge St.||New Ulm||MN||Unknown||113||1/8/2013|
|H.C. Starck Inc.||1250 E. 222 St.||Euclid||OH||Layoff||67||1/21/2012|
|The Andersons Inc.||3725 Williston||Northwood||OH||Closure||121||1/1/2012|
|Hill-ROM||4349 Corporate Road||North Charleston||SC||Layoff||29||12/31/2012|
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