Citigroup to lay off another 10,000 - report

Financial services company said to be gearing up for more job cuts, rate hikes for cardholders.

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By David Ellis and Aaron Smith, staff writers

NEW YORK ( -- Citigroup will reportedly undertake another round of massive layoffs and is poised to start raising credit card rates for a number of its customers.

The battered financial services giant will let go some 10,000 workers, with the cuts starting as early as this week, in such areas as the company's investment banking and wealth management divisions, The Wall Street Journal reported Friday.

Over the past four quarters, the New York City-based bank has trimmed its bloated payroll by 23,000. As of the end of the third quarter, Citigroup employed approximately 352,000 workers.

A company spokesman confirmed that Citi had plans to eliminate just over 9,000 jobs over the next 12 months. The Journal report, however, suggested that the 10,000 cuts would be in addition to the 9,000 still on the chopping block.

"We have said consistently that we will reduce expenses, including through staff reductions," said Citi spokesman Mike Hanretta. "We will continue to carefully manage our headcount levels as we re-engineer the company in line with our stated goal and market realities."

Citigroup sources said that CEO Vikram Pandit will provide an update on the state of the company to employees at a town hall meeting Monday morning. It remains unclear, however, whether those talks will touch on payroll cuts.

Some Citigroup customers could also soon feel the squeeze. Citi's Hanretta said the company also planned to start adjusting the terms of its agreements with many cardholders - a move that likely means an interest rate increase for many Citi consumers.

A source close to the situation said that any increases would be close to three percentage points on average, and that could affect roughly 20% of its credit card accounts.

"We are carrying out this repricing in order to continue lending in this environment," the company said in a statement.

Citigroup has faced plenty of scrutiny in recent weeks. Its stock, which is down 68% so far this year, has lost about a third of its value in the last two weeks alone. Citigroup (C, Fortune 500) stock fell slightly in late afternoon trading Friday.

At the same time, there has been speculation that big changes could come at the top of the organization. More specifically, there's talk that the company's board is considering replacing its Harriman, Sir Win Bischoff, the Journal reported earlier this week.

Citigroup's board sent a memo to all employees Thursday calling the report "irresponsible and completely inaccurate."

"The Board of Directors and management are operating as one team completely aligned on critical issues, opportunities, and the direction of the company," Citigroup director Richard Parsons wrote in a memo to employees.

In October, Citigroup, the nation's fourth-largest bank in terms of deposits, was one of nine banks selected by the U.S. Treasury for a $25 billion cash injection in exchange for stock. To top of page

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