Citigroup announced it will cut 11,000 jobs as part of plan to trim costs, the first major initiative from the bank's new CEO, Michael Corbat.
The bank will also take a $1 billion pre-tax charge during the fourth quarter, and approximately $100 million in related charges during the first half of 2013 as part of the plan, which is expected to save $900 million in 2013 and more than $1.1 billion annually beginning in 2014.
The changes will also impact the bank's revenue .. but not enough to outweigh the benefits of the cost cutting. Citigroup said the moves should lead to a reduction of less than $300 million in revenue a year annually.
"These actions are logical next steps in Citi's transformation," said Corbat, who took the helm after former CEO Vikram Pandit stunned investors when he announced his immediate departure in mid-October.
Citigroup has already begun making the layoffs, but expects them to continue throughout 2013.
While the cuts are "fairly comprehensive," impacting the major divisions around the globe, Citi CFO John Gerspach said they are "part of a continuum."
Gerspach, speaking at the Goldman Sachs Financial Services Conference Wednesday afternoon, said the bank is trying to "improve efficiencies." He added that Citi's management team will "continue examining every one of our businesses to make sure we are truly optimizing the implementation of our strategy."
Layoffs are nothing new at Citi. Since November 2008, the bank has slashed about 25% of its staff. The 11,000 job cuts that were announced Wednesday amount to 4% of Citigroup's current workforce, which stood at 261,000 full-time employees at the end of September.
The bank's streamlining plans will impact about 1,900 jobs in the institutional clients group, which includes investment banking and trading, and 6,200 positions in the global consumer banking division, which includes selling or scaling back operations where returns are low, such as Pakistan and Turkey.
Citi said it will also consolidate and close 84 bank branches in Brazil, Hong Kong, Hungary, Korea and the United States. That works out to 2% of its branches worldwide.