Job losses confirmed at Cititgroup

As the credit squeeze continues, Citigroup, the world’s largest bank, has announced its second consecutive quarterly loss and has confirmed 9,000 job cuts.

The US investment bank made a loss of $5.1 billion (£2.7 billion) in the first quarter, however, this was less than the $9.8 billion loss reported in the final quarter of last year.

The results included around $12 billion of write-downs for sub-prime mortgages and other assets and exposure affected by the credit crisis.

Swiss bank UBS is the biggest casualty of the credit squeeze so far with losses of $37.4 billion (£19 billion).

Citigroup employs approximately 369,000 people worldwide, which includes 11,000 in London. The job cuts are in addition to the 4,200 redundancies announced earlier this year.

Citigroup chief executive Vikram Pandit said our financial results reflect the continuation of the unprecedented market and credit environment.

Lenders worldwide have written off over $200 billion as a result of the credit squeeze.

Last week, the world’s largest stockbroker, Merrill Lynch, announced it is to axe 4,000 jobs worldwide with up to 400 of its 4,500 London staff facing redundancy. The job cuts are as a result of poor risk management for Merrill’s over-exposure to bad sub-prime mortgage debt.

Merrill also announced heavy losses from the first quarter of this year. The bank said it lost $1.96 billion (£1 billion) compared with a profit of $2.1 billion a year ago - broadly in line with analysts expectations. Merrill has already written off $24 billion since the sub-prime mortgage crisis broke last year.

Commentator David Buik of BGC Partners said the job cuts were inevitable and more banks will follow suit.

Discuss this in the Finance Markets forums

Story link: Job losses confirmed at Cititgroup