Perhaps in a recognition of the collapsing yield curve, and for sure in the face of the mainstream’s bullish narrative on US banks in a post-rate-hike paradigm, Citi has announced plans to cut at least 2,000 jobs starting next month. Despite exuberance over higher rates, it appears Citi’s CEO Michael Corbat wants to restructure some of the bank’s businesses.
As Bloomberg reports, the substantial portion will be in middle or back-office positions, according to a person briefed on the plans, who asked not to be identified discussing personnel matters. The reductions are part of a repositioning the firm announced this month and will occur across the New York-based lender’s global footprint, people familiar with the matter said.
Citigroup, which had 239,000 workers at the end of September, has already held discussions with some affected employees, said one of the people, who declined to provide specifics on the businesses targeted.
Employees in the institutional business, which houses the trading and investment-banking operations, will be among those dismissed, one of the people said. Cuts in that unit will be more in line with annual performance-based dismissals that Wall Street firms employ to maintain competitiveness and adjust businesses to shifting markets, the person said.
Three years after taking over as CEO, Corbat is still finding areas to trim in a firm that boasted 374,000 employees before the financial crisis forced a government bailout. The bank will take a charge of about $300 million in the fourth quarter to help “resize our infrastructure and our capacity to deal with the continuing low-revenue environment,” Chief Financial Officer John Gerspach said Dec. 9 at an investor conference in New York.
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Finally, we wonder if Citi has viewed this chart…
And sees the painting on the wall.
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