Citigroup shares slip after bank announces 4,500 layoffs
Citigroup Inc. shares fell on Wednesday after Chief Executive Vikram Pandit said the bank will lay off 4,500 employees as it attempts to trim costs in an "extremely challenging operating environment."
The cuts, which amount to less than 2% of Citigroup's approximately 267,000 employees, will be spread over several quarters, Pandit said at an investor conference Tuesday sponsored by Goldman Sachs Group Inc. Citigroup will take a $400-million charge in the fourth quarter related to the layoffs, factoring severance and other expenses.
In mid-day trading Wednesday, the company's shares were down 1.6%, or 48 cents, to $29.27.
The Citigroup layoffs will come in part from the bank's proprietary-trading operations, Pandit said.
"It's a combination of market uncertainties, sustained economic weakness in the developed economies and, as well, the most substantial regulatory changes we've seen in our lifetime," Pandit said of the atmosphere on Wall Street, warning that the difficulties will likely last for years.
Several financial institutions have been paring down their staffs this year. Bank of America Corp. said in the fall that it plans to cut out 30,000 jobs over the next few years. JPMorgan Chase and Swiss lender UBS also said that they plan to shrink their headcounts.
-- Tiffany Hsu