Vikram Corbat

5 December 2012 By Antony Currie Follow @AntonyMCurrie

Mike Corbat is picking up where Vikram Pandit left off. The bank will cut 11,000 jobs, reaping savings of $1.1 billion a year. It won’t endear the new boss to his staff. But it’s not a radical move, hitting back-offices hardest. Corbat’s merely tweaking Pandit’s strategy.

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In his first major initiative since replacing Vikram Pandit as Citigroup’s chief executive officer, Mike Corbat announced a restructuring that includes eliminating 11,000 jobs and should result in annual cost savings of $1.1 billion.
“These actions are logical next steps in Citi’s transformation,” Corbat said in a statement. “While we are committed to – and our strategy continues to leverage – our unparalleled global network and footprint, we have identified areas and products where our scale does not provide for meaningful returns. And we will further increase our operating efficiency by reducing excess capacity and expenses, whether they center on technology, real estate or simplifying our operations.”
The bank said it expects to record pre-tax charges of approximately $1 billion in the fourth quarter and approximately $100 million of related charges in the first half of 2013. Citi currently expects the cuts to generate $900 million of expense savings benefiting 2013 results and that the annual expense savings will exceed $1.1 billion annually beginning in 2014. Citi also expects the repositioning actions to have a negative impact on annual revenue of less than $300 million.

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