During the week, Citigroup made the announcement of its plants to cut a total of 11,000 positions, eliminating a total of 4 percent of the workforce. The reason for the cuts is to help cut back on costs, helping to save Citigroup money, according to Dealbook from the New York Times.
With the new reduction in place, a portion of the job cuts will take place within the clients division. A larger portion of those jobs cuts will take place within the banking business and the operations and technology department. These reductions come at a time shortly after the chairman of Citigroup, Michael E. O’Neill, made the decision of the ouster for the former CEO, Vikram S. Pandit.
The change of power took place during the month of October, and many of the people of Wall Street were surprised by the decision. There has also been a lot of concern on what O’Neill might end up doing with the bank, along with Michael L. Corbat, who was selected to be the successor of the bank. Corbat, who is now operating as the chief executive officer, released a statement.
In the statement, he said, “These actions are logical next steps in Citi’s transformation.” Corbat also said, “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.” Corbat took on the position as chief executive just a few months ago, yet he still says he is intending on working on a strategy with the core businesses for the bank.
The decision to make the job cuts took place after a meeting that was held in November. The meeting was lengthy, and it involved just about everyone who is part of the different businesses for Citigroup. The purpose of the meeting was to help figure out ways to save Citigroup money by reducing costs in different areas. At the beginning of this week, Corbat spoke with the board about the cuts that would need to be made to reduce costs. As most people know, Citigroup has quite the history, having dealt with troubling finances before.
Ever since dealing with such a crisis, Citigroup has been making efforts to cut back on its expenses, hoping to save money and reduce spending. Even so, the efforts have been a struggle. Many of the executives working for Citigroup are having a rough time with the bank’s business. For the past three years, O’Neill has been focused primarily on reducing the costs for Citigroup and will continue to keep this focus.