by Christopher Freeburn | December 5, 2012 11:51 am
Shares of Citigroup (NYSE:C) surged in Wednesday trading after the bank announced that it will cut 11,000 workers worldwide in a bid to reduce expenses.
Citigroup said it would take a pre-tax charge of $1 billion in the fourth quarter relating to the layoffs, which are expected to save up to $1.1 billion in annual expenses, Reuters noted.
Investors liked the news, sending Citigroup shares up more than 5% in morning trading.
Most of the job cuts will come at the global consumer banking unit, which will lose 6,200 workers. Citigroup will look to sell or reduce its operations in Pakistan, Romania, Uruguay and Paraguay to concentrate on other markets.
It will also shutter 84 bank branch offices worldwide, the majority of those will be in the U.S.
The layoffs, which affect 4% of the bank’s workforce, come as new CEO Michael Corbat attempts to restructure the financial services giant. Corbat, who replaced ousted Vikram Pandit in October, issued a statement saying that the bank would seek to trim “excess capacity and expenses.”
Analysts noted that Corbat has a reputation for streamlining companies to boost earnings.
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