Citigroup Set to Sack 6,500 Employees Globally

Business News

USA, Jun 23: Financial giant Citigroup, led by India-born Vikram Pandit, is in for an aggressive round of layoffs, where it will start firing about 6,500 employees from its investment banking business from Monday, media reports said.

After posting a loss to the tune of $15 billion in the past two quarters and expected to see further billions of dollars of subprime crisis-related write-downs, Citigroup would dismiss this week 10 per cent of its 65,000-strong investment banking workforce across the world, the Wall Street Journal reported.

Quoting unnamed people familiar with the matter, the report said that the "pink slips are likely to be handed out on Monday."

The latest round of layoffs come top off close to 10,000 employees having shown the door earlier this year, as part of Pandit's aim to cut the company's annual expenses by $15 billion. The company has more than 350,000 employees on its payrolls across the world.

In another report, British daily The Times quoted unnamed sources as saying that even senior managing directors would not be immune from the layoffs.

"Citigroup's mergers and acquisitions bankers may bear the brunt of the cost-cutting because their ranks were not sharply reduced earlier this year. No major department of the investment bank is likely to be spared, apart from certain businesses in emerging markets and its lucrative transactions services division," The Times report said.

In April, Citigroup said that 9,000 jobs would go on top of the 21,000 eliminated in the past year.

The Wall Street Journal report said that "no major department is likely to be spared, aside from some businesses in emerging markets and Citigroup's lucrative transactions-services arm."

"Entire trading desks in New York and other cities are expected to be eliminated. And unlike Citigroup's other recent reductions, this round will feature layoffs of dozens of senior managing directors," it quoted the people close to the matter as saying.

The latest round of job cuts is the first major "move by John Havens, who took the helm of Citigroup's institutional-clients group, which includes the investment bank, in late March."

The report said that, Havens, a longtime lieutenant of Pandit, has concluded that some of the investment bank's businesses have been rendered obsolete by the credit crunch, while he sees others as operating inefficiently and generating inadequate returns.

The report in the United Kingdom daily, The Times, further said that investment banking giant Goldman Sachs is also understood to have made more jobs cuts at its investment banking division last week.

"It has been eliminating 10 per cent of the roles in the M&A and corporate fund raising divisions this year, and the latest round of redundancies began last week," the report noted.

Recently, Swiss investment banking major Credit Suisse announced 75 job cuts in its investment bank and support services division in the UK. So far in 2008, Credit Suisse has cut 1,000 investment banking jobs worldwide.