Citigroup may cut 15,000 jobs: papers

NEW YORK (Reuters) - Citigroup Inc. said on Monday it will announce results of its cost review by mid-April, amid reports it may cut 15,000 jobs as shareholders demand better performance and a higher stock price.

Chief Executive Charles Prince is under pressure to cut costs, which last year rose 15 percent while revenue increased 7 percent. In December, he directed Chief Operating Officer Robert Druskin to finish a broad expense review by this week.

The proposed cuts would affect 5 percent of Citigroup's work force of 327,000, and may include attrition, according to the Wall Street Journal and New York Times.

Citigroup may take a charge exceeding $1 billion, the Journal said, citing people familiar with the matter.

Consumer operations would be hardest hit, and the corporate and investment bank could lose several thousand jobs, the Times said, citing executives briefed on the matter. The net job loss, including attrition, could be 10,000 to 12,000, the Times said.

Citigroup shares fell 28 cents to $51.44 in afternoon trading on the New York Stock Exchange.

The cuts "indicate that the firm is finally serious about improving the bottom line," wrote Morningstar Inc. analyst Craig Woker.

He nevertheless said "job cuts oftentimes slow revenue growth, which is Citi's core problem. Additionally, such a massive restructuring takes considerable time to flow through to the bottom line."

Speaking to reporters in New Delhi, Prince would not discuss the reports. He said New York-based Citigroup will detail results of its review by April 16, when it reports first-quarter earnings.

Because of its size, Citigroup will need to cut deeper than rivals to make a meaningful dent in its cost base, which totaled $52 billion last year. Profit totaled $5.13 billion.

Wachovia Corp. expects this year to finish cutting expenses by roughly 6 percent to 7 percent, while SunTrust Banks Inc. has set plans to cut costs by 8 percent.

Through Friday, Citigroup shares had risen just 14 percent since Prince took over in October 2003.

In contrast, shares of its largest rivals, Bank of America Corp. and JPMorgan Chase & Co., are up 32 percent and 41 percent, respectively. The 24-member Philadelphia KBW Bank Index is up 32 percent.

ENOUGH TIME?

Prince will have to cut deeply enough to satisfy shareholders like Saudi Prince Alwaleed bin Talal, who last July told Reuters that "draconian" reductions were needed.

Yet the bank cannot cut so deeply as to hinder growth in U.S. consumer operations, which include retail banking, credit cards and consumer finance and is its largest unit.