Citigroup has announced that the bank will be laying off 4,500 workers in the next few months. The layoffs are expected to affect back office positions and investment banking operations the most, but nearly every division will see some cuts.
Citi has laid off nearly 100,000 workers since the beginning of the financial crisis in 2008. The current round of layoffs will reduce the company’s workforce by 2%.
The company will also be taking a $400 million charge in the fourth quarter to cover the costs of downsizing the employees, including severance costs. Many banks have announced extensive layoffs since last fall.
The companies on Wall Street have seen the world economy slow and their trading business decrease as investors have sought more stable investment vehicles for their money. Large banks have also seen a reduction in the demand for loans, including unsecured personal loans increased regulations, and consumer anger over higher fees for services.
Citi chief executive, Vikram S. Pandit, said the layoffs are part of his plan to brace the company for an even more difficult road ahead. Speaking at a Goldman Sachs financial services conference, Mr. Pandit said, “Financial services faces an extremely challenging operating environment. These trends will likely significantly affect the competitive landscape in the coming years.”
Since becoming leader of the bank a few years ago, Mr. Pandit has shed hundreds of billions of dollars in assets to lighten the company’s balance sheet, strengthened risk controls and repaid the $45 billion bailout received to prevent the bank‘s collapse in the fall of 2008.
Citi has had seven consecutive quarters of profits, but has struggled to increase its income. Revenue fell 10% to about $60 billion in the first nine months of this year. The company’s trading business has suffered significantly from the reduction in trading volume tied to the financial turmoil in Europe.