According to the Wall Street Journal, Citigroup has begun the first phase of its cost-cutting program by handing out redundancy slips to over 1,000 employees, which could be part of approximately 15,000 jobs set to be lost as the company seeks to reduce annual expenses by over $1 billion.
The group’s restructuring plan is likely to involve the layoff of 5% of the workforce or around 15,000 employees but could reach to 17,000, Reuters revealed. According to the news provider, citing an anonymous person, losses will be seen in the trading and prime brokerage units of the company’s investment banking division.
The cost-cutting plan follows a three-month review of expenses by COO Robert Druskin, reported Bloomberg. As part of the plan, Citigroup may close offices, relocate its staff to cheaper sites and combine computer systems to save around $2 billion a year, Bloomberg cited Banc of America Securities analyst John McDonald as saying.
Furthermore, CEO Charles Prince is also reportedly under pressure from shareholders to control the rising expenses, which increased twice as fast as revenue in 2006.