) has initiated the layoff of nearly 50 investment bankers in its
Europe, the Middle East and Africa (EMEA) division. The
dismissals are part of its decision to restructure its
operations, which will ultimately result in over 11,000 job cuts.
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Citigroup began the layoff process in the EMEA Investment Banking
division early this week. It is widely speculated that at least
15-18 managerial positions will be eliminated. Europe will bear
the maximum brunt as the uncertain economy creates substantial
pressure to trim costs.
Previously in Dec 2012, Citigroup announced its decision to
terminate 11,000 employees as it prepared to counter the fall in
revenues through expense reduction initiatives. Aimed at
increasing the efficiency of the company's overall business, the
move includes streamlining operations as well as optimizing its
footprint across geographies.
Encouragingly, this will result in expense savings of $900
million in the year ahead. Moreover, the annual cost savings is
projected to surpass $1.1 billion beginning 2014.
Amid a challenging operating environment, lower returns and
stringent capital norms, many global banks are downsizing
businesses to adapt to the economic scenario. Apart from
Bank of America Corporation
Deutsche Bank AG
) are rightsizing businesses and slashing jobs to address the
This time around, Citigroup's restructuring initiatives are
expected to be severe compared to initiatives announced in 2011,
which involved trimming 4,500 employees. Tepid economic recovery
remains a big impediment to generating substantial revenues.
Therefore, to sustain and elevate profitability, several banks
are resorting to cost-reduction measures including layoffs and
However, layoffs will lead to rising unemployment, which has the
potential to put the economic recovery on the back foot.
Currently, Citi carries a Zacks Rank #3 (Hold).