Citigroup lay-offs surge after latest losses

By John Hill on April 24, 2008 9:00 AM |

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CITIGROUP may be about to axe up to 2,000 jobs in Canary Wharf as it tries to off-set its credit crunch losses.

The banking giant has announced worldwide cuts of 9,000 jobs after revealing a first quarter loss of £2.7billion ($5.11bn) last week. Commentators predict a number will come from the bank’s UK headquarters in Canada Square.

Citigroup is the biggest bank in the US, but only Swiss firm UBS has been forced to announce more write-downs and credit losses since America’s sub-prime mortgage market collapsed last year. Worldwide job losses of 4,200 were scheduled by the bank in mid-January after it was forced to write off £11.3billion in sub-prime investments and losses in the fourth quarter last year.

But the expected cuts have more than doubled after further write-downs of up to £6billion were made in the first quarter of this year.

A UK-based spokeswoman for Citigroup declined to specify which countries would be most affected by the job cuts.

Citi’s chief executive officer Vikram Pandit claimed the bank had “taken decisive and significant actions to strengthen its balance sheet”.

He said: “We continue to enhance our risk management processes, our capital productivity and expense containment, as well as our ability to deliver innovative, world-class products that meet our clients’ specific needs. To achieve this, we recently reorganised the businesses along regional and product lines to bring us closer to our clients.
“At the same time, we are taking the necessary steps to make Citi more efficient while fostering a culture of accountability and teamwork.”

Banks around the Wharf have moved to streamline their workforces. Firms such as Bank of America, Credit Suisse and Lehman Brothers are among those which have announced cuts, and business analysts have predicted the UK’s financial sector could shed at least 10,000 jobs in the next three months.