Citigroup plans further job cuts

Citigroup, the world’s largest bank, is planning thousands more job losses but has not divulged a figure ahead of the appointment of a new chief executive. This is the second round of redundancies this year as the struggling bank aims to improve profitability following billions of dollars of investment losses.

The bank is looking to replace former chairman and chief executive, Charles Prince, who stepped down earlier this month after the bank posted a 57% decline in quarterly profits after losses in the sub-prime mortgage market. It is expected that the bank will post a further $4 billion of sub-prime-related losses in the first quarter of 2008.

Sir Win Bischoff, Citigroup’s former European head, is acting as chief executive until a replacement is found for Mr Prince.

A new redundancy plan would need to be authorised by Mr Prince’s replacement. However, the bank is so sure that it needs to carry out widespread job cuts that it is preparing a rough plan that would involve thousands of redundancies.

In a brief statement, Citigroup said we are engaged in a planning process in anticipation of our new chief executive and our business heads in which we can be more efficient and cost-effective to position our business in line with economic realities. Any reports on specific numbers are not factual.

A few days prior to Mr Prince’s resignation, Merrill Lynch hit similar problems which resulted in the departure of its chief executive, Stan O’Neal.

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