Citigroup Readies More Job Cuts Under Pandit's Plan

Citigroup Inc. may begin another round of job reductions as soon as this week under a plan drawn up in March to cut the trading and investment-banking workforce by 10 percent, said a person with knowledge of the matter.

The largest U.S. bank has eliminated about half of the 6,000 jobs targeted since then, said the person, who declined to be identified because Citigroup hasn't disclosed the plans publicly. Citigroup employs more than 300,000 people worldwide and has announced about 13,000 job reductions this year.

Chief Executive Officer Vikram Pandit is lowering costs and shedding assets after the New York-based company reported two straight quarterly losses totaling a record $15 billion. The world's largest banks and brokerage firms have slashed more than 80,000 jobs since subprime mortgage defaults infected credit markets and led to almost $400 billion of writedowns and losses.

``I see more downsizing to come,'' said Andy Mantel, managing director of Pacific Sun Investment Management Ltd. in Hong Kong. ``Banks need to take precautionary measures.''

Mark Watson, a 22-year Citigroup veteran based in London, has decided to leave the bank, according to a memo sent to employees last week. He had been co-head of debt underwriting until November, when Citigroup combined its equity and debt underwriting units and the equity head, Tyler Dickson, was promoted to lead the larger group. Citigroup said Watson would ``work on transitional issues before taking a new position within the organization.''

Stock Decline

The shares fell 63 cents to $18.67 as of 11:43 a.m. in New York Stock Exchange composite trading. Citigroup has dropped 67 percent since reaching a record $56.41 in December 2006, the biggest decline since December 1991, when predecessor Citicorp fell 75 percent to $8.63 from the prior peak of $35.13 in October 1989.

The bank has disclosed plans to eliminate more jobs during the past year than any other financial institution, according to data compiled by Bloomberg. UBS AG, Lehman Brothers Holdings Inc. and Merrill Lynch & Co. are among companies that have disclosed more than 5,000 job reductions.

More than two dozen financial companies worldwide have announced plans to eliminate more than 83,000 jobs since last July, or about 3.3 percent of their employees. Following the dot- com bust in 2000, 17 percent of banking and securities in New York were wiped out, according to the Bureau of Labor Statistics.

`Re-Engineering' Effort

``Citi indicated earlier this year that it would be resizing this business in response to market conditions and as part of our ongoing re-engineering efforts,'' said Dan Noonan, a spokesman for the division, in a prepared statement.

The company probably will report a second-quarter loss of 40 cents a share after $8.7 billion of asset writedowns, UBS analyst Glenn Schorr said in a June 20 note to clients.

Schorr's prediction came after Chief Financial Officer Gary Crittenden forecast ``substantial'' additional writedowns and more losses on consumer loans. Citigroup's $42 billion of credit losses and writedowns since last year account for about 10 percent of the global total, according to Bloomberg data.

Citigroup has lost more than any company in the mortgage market rout and its shares tumbled 63 percent in the past year. Pandit, 51, was promoted in December to replace Charles O. ``Chuck'' Prince, who was ousted the previous month.

Securities Unit

Citigroup said in January it would eliminate about 4,000 jobs in the securities division, and said two months later that the number had increased by about 2,000. Citigroup then said in April it would slash 7,000 jobs outside the investment-banking group over the next year, and executives have said further reductions are likely.

The Wall Street Journal reported yesterday that employees may begin receiving termination notices this week.

Goldman Sachs Group Inc., the biggest U.S. securities firm, will get rid of as much as 10 percent of the jobs in its investment-banking division in one of the company's largest single rounds of headcount reductions this year, the Financial Times reported today, without citing anyone.

Goldman spokeswoman Connie Ling declined to comment on the reported job cuts.