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NEW YORK - Citigroup, the global banking giant, is readying a round of cost cuts that could result in as many as 15,000 job losses and a US$1 billion-plus ($1.4 billion) bill for redundancy pay-outs and other charges.
The restructuring looks set to go further than Wall Street had been expecting, and could result in significant job cuts across the company's US retail bank and at its European headquarters in London.
In all, around 5 per cent of the company's 327,000-strong global workforce could be axed.
The company refused to comment on the speculation yesterday, but said it would announce a cost reduction programme before its annual shareholder meeting on April 17. Some of the bank's largest investors have become restless because of a disappointing share price performance, which they blame on spiralling costs across the group. While revenues rose 7 per cent last year, costs were up 15 per cent.
The deeper than expected cost cuts would represent a victory for the Saudi Prince Alwaleed bin Talal, who is Citigroup's largest single shareholder. Last northern summer, he made a public call for "draconian" measures to reduce overheads, and Chuck Prince, the company's chief executive, met the prince in the Middle East earlier this year to discuss strategy.
The cost-cutting plan is being spearheaded by Bob Druskin, a long-standing associate of Prince, who was promoted to chief operating officer in December.
The former chief financial officer, Sallie Krawcheck, had drawn fire for her failure to rein in costs, and she has since been shunted sideways to run the wealth management division.
It is expected that job losses will be concentrated in the US retail branch network and the global investment bank, where Prince has hinted he wants to cut layers of management. High cost centres such as New York, Hong Kong and London are expected to be hardest hit.
Citigroup employs more than 9000 people in the UK, where it is headquartered at Canary Wharf.
- INDEPENDENT
