Following estimates that Singapore may overtake the City of London as the leading generator of banking roles, the financial job market has taken another hit. Michael Corbat, the brand new chief executive of Citigroup who assumed the mantle less than two months ago, has made his first major decision as CEO; 11,000 jobs will be axed, in order to reduce costs.
The cuts will take place across a number of divisions, including emerging markets, global retail operations, investment banking and various support functions. Consumer banking operations will also suffer. In a memo to Citigroup staff, Corbat said; “Given the challenging environment, we need to continue to be disciplined in how we allocate our finite resources.”
Citigroup struggled massively during the financial crisis, and had to be bailed out. Its total number of personnel has plummeted by 113,000 since 2007, as it has sold a large portion of its regional businesses and rolled out numerous redundancies. These new cuts will streamline the current staff of 262,000 by about 4%.
Corbat’s move (his first official decision since being made CEO) will allow Citi to cover restructuring costs of $1.1BN in his first quarter, giving the bank a fresh start for the coming year.
While it may be bad news for those being made redundant, it is good news for Citi – the bank’s shares rose more than 6% following the announcement.
Of course, Michael Corbat is not the first banking CEO to have to make this difficult kind of decision. The entire banking sector has seen hundreds of thousands of redundancies since the collapse of Lehman Brothers, as organisations are forced to try to cope with higher capital requirements, lower revenues and mounting technology costs. UBS announced two months ago that it would be letting 10,000 of its employees go, as part of its withdrawal from fixed income trading. Deutsche Bank, Morgan Stanley and HSBC are also all in the process of downsizing teams.
This mass, industry-wide restructuring makes it even harder for business and finance graduates to gain a foothold in the sector. With cost cutting a higher priority than ever before, all employers will have a strict focus on their bottom line, and how you as a candidate can add value to their organisation.
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December 10th 2012