Citigroup slashes a further 50,000 jobs

| November 17, 2008 | 0 Comments

US banking giant Citigroup is to slash 52,000 jobs, far more than analysts had predicted.

The job losses are in addition to the 23,000 staff cut already this year and the total 75,000 job losses represent a reduction of approximately 20% of its workforce, leaving it with 300,000 jobs globally.

The bank, which is one of the largest banks in the US, has 12,000 employees in the UK many of whom are based at its headquarters at Canary Wharf in London.

The bank said the cuts will come from redundancies, the disposal of units and natural wastage and are in a bid to offset enormous losses which arose from the US sub-prime mortgage crisis and the credit crunch.

Some analysts believe the bank will not make a profit again until 2010 after it has lost over $20 billion (£13.6 billion) in the last 12 months alone.

Citigroup chairman, Win Bischoff, said the axe will fall heavily on London and New York.

Shares in the banking giant lost 4.4% earlier today, down to $9.10. Citigroup stock is down nearly 70% this year.

Vikram Pandit, Citigroup’s chief exec, describes the underlying business as strong and revenues stable. He has announced plans to withdraw from riskier businesses.

Mr Pandit has been under immense pressure and according to analysts, he will face further investor dissatisfaction if this latest plan fails to revive the bank’s stock.

The bank is one of nine institutions receiving financial aid from the US Government’s bailout package.

The news follows that from Royal Bank of Scotland (RBS) who announced last week it is to axe 3,000 staff from its global banking and markets division.

The job losses at Citigroup and RBS add to the 160,000 already lost in the past year from banks and brokerages as a result of the economic downturn, and many reports are suggesting that there is more to come.

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