Bloomberg News

Citigroup Says Hiring Cut to Critical Jobs Only Amid Slump

September 15, 2011

(Updates share price in fifth paragraph.)

Sept. 15 (Bloomberg) -- Citigroup Inc., the third-biggest U.S. bank, said it will limit hiring to only “critical” jobs as the economic slowdown continues and revenue slumps.

The plan will apply to Citigroup’s trading and investment- banking units worldwide as well as consumer banking and global transaction services, Shannon Bell, a spokeswoman for the New York-based bank, said in a phone interview. The bank had 263,000 employees at the end of the second quarter.

Chief Executive Officer Vikram Pandit is trying to control costs as weakening consumer confidence and high unemployment threaten profit. Revenue for the first six months fell 15 percent to $40.3 billion, including sales at the bank’s Citi Holdings unit, which has about $300 billion of unwanted businesses and assets. Profit fell 11 percent to $6.34 billion.

“In light of the current environment and our ongoing efforts to tightly manage expenses, we are currently only filling positions we believe are critical to the line of business or function,” Bell said.

Citigroup rose $1.20, or 4.4 percent, to $28.59 in New York Stock Exchange composite trading at 4:15 p.m. The shares tumbled 42 percent this year through yesterday, compared with the 27 percent decline of the 24-company KBW Bank Index.

Hiring Freeze

“It does look like a hiring freeze,” said Richard Staite, a London-based analyst at Atlantic Equities LLP who has an “overweight” recommendation on Citigroup shares. “I don’t think that’s too surprising in what is a very difficult revenue environment for all banks. They clearly face a difficult balancing act.”

Bank of America Corp. and HSBC Holdings Plc have each announced plans to slash 30,000 jobs while firms including Lloyds Banking Group Plc and UBS AG said they’ll make headcount reductions.

Bell declined to comment on whether the bank planned to cut jobs at any of its so-called core businesses, including trading and investment banking. Citigroup previously announced plans to add branches outside the U.S. and more than double staff in China to 12,000 as Pandit, 54, seeks to boost the bank’s presence in emerging markets.

The company has also hired about 40 managing directors this year for its investment-banking unit. The firm said today that it hired three equity-derivative salesmen in London.

“We’ve added talent in businesses and regions that are targeted for growth,” Bell said.

Job Vacancies

Citigroup, which says it has operations in more than 100 countries, has posted at least 1,000 job vacancies on its website since the end of August, including a legal counsel in Budapest and a South Africa-based executive recruiter charged with the “building of a talent warehouse for Africa,” according to the website.

The bank is also hiring for CitiFinancial and the retail partner cards unit, businesses that Pandit is trying to sell, according to the website. The new hires would be based in locations including Owasso, Oklahoma, and Waterville, Maine. Bell declined to comment on the job posts.

Citigroup announced yesterday the Citi On Campus App, a tool that students can use on iPhones to find nearby Citigroup recruiting events, according to a statement.

Expenses at the bank rose 8 percent to $25.3 billion for the first half of 2011, compared with the same period last year. Chief Financial Officer John Gerspach told analysts in July that expenses for the year would be higher than previous forecasts.

Sales at Citigroup’s securities-and-banking unit, which includes trading and investment banking, fell 18 percent to $11.5 billion. Regional consumer-banking revenue stayed flat at $16.2 billion. The bank’s transaction-services unit increased revenue 6 percent to $5.2 billion.

Pandit has cut more than 100,000 workers from the bank’s payroll since he became CEO in December 2007 through dismissals and sales of distressed assets and businesses in Citi Holdings.

--Editors: Steve Dickson, William Ahearn

To contact the reporter on this story: Donal Griffin in New York at dgriffin10@bloomberg.net

To contact the editor responsible for this story: David Scheer at dscheer@bloomberg.net


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