Citigroup this morning confirmed plans to cut 17,000 jobs and transfer about 9,500 to less expensive locations worldwide, affecting about 8% of its total workforce. Citi says it wants to eliminate organizational, technology and administrative costs that do not contribute to our ability to efficiently deliver products and services to our clients. The action is expected to generate total expense savings of approximately $2.1 billion in 2007, $3.7 billion in 2008, and $4.6 billion in 2009. Citi says it will record a charge of $1.38 billion pre-tax, $871 million after-tax, in the first quarter of 2007 and additional charges totaling approximately $200 million pre-tax over the subsequent quarters of 2007. Citi says that it will consolidate some back-office, middle-office and corporate functions to eliminate duplication.
Charles Prince, Citigroup’s CEO, yesterday announced that Marjorie Magner, Chairman and CEO of the company’s Global Consumer Group, will be leaving the company by October 1st. Prince then named Steven Freiberg, Chairman and CEO of Citi Cards and Ajay Banga, President of Retail Banking North America, as co-heads of the Global Consumer Group. Freiberg will lead the North American business (U.S. and Canada) and Banga will lead the International operations. Prince said the new structure will enable the company to better focus on customer’s needs in an integrated fashion across all product lines and more effectively respond to the specific opportunities in markets at different stages in their development. Last month, Citigroup announced that its President, COO and Board member Robert Willumstad will be leaving next month after he was reportedly disappointed with not receiving the CEO position to succeed Sanford Weill. Citigroup recently reported that second quarter profits for its credit card business in North America inched up by a mere 1% to $861 million. Credit card outstandings for North America also grew a modest 1% over 2Q/04 to $139.8 billion. Citi’s account base at the end of the second quarter declined by 1.6 million accounts from the prior quarter and was down 2% from one-year ago. (CF Library 7/15/05; 7/18/05)
Citigroup has promoted Manuel Medina-Mora to Chairman and CEO of Citigroup Latin America and Mexico. He will retain the position of CEO of Banamex that he has held since 2001. Jorge Bermudez, outgoing CEO of Citigroup Latin America, has become Senior International Advisor of Citigroup. Citigroup also announced that Guillermo Acedo has been named Head of the Global Consumer Group – Latin America, and Gustavo Marin has been named Head of the Global Corporate and Investment Banking Group – Latin America. Additionally, John Gerspach has been named Chief Administrative Officer of the Latin America region.
Grupo Financiero Banamex has become the number one corporate bank, the number one retail bank, the number one credit card issuer, and the number one pension fund manager in Mexico.