By Jonathan Stempel and Dan Wilchins
NEW YORK (Reuters) - Citigroup Inc (C.N: Quote, Profile, Research) is cutting about 2,000 more investment banking and trading jobs, a person briefed on the matter said, as the largest U.S. bank moves to lower costs after subprime mortgage and credit problems led to a record quarterly loss.
The cuts are on top of 4,200 job losses announced in January by Chief Executive Vikram Pandit, according to the person, who asked not to be named. Most of the January cuts were in investment banking and trading, the person said. The bank has an estimated 60,000 employees in its securities business, and ended 2007 with about 375,000 employees overall.
“Citigroup needs to cut costs, perhaps more sharply and quickly than rivals that are in better financial shape,” said Bill Hackney, who oversees about $8.9 billion at Atlanta Capital Management Co. “Employment at large financial services firms like Citigroup could easily shrink 10 to 15 percent in the next five years.”
Adam Castellani, a Citigroup spokesman, said the bank expects a larger-than-usual number of job cuts in its institutional clients group. This group includes investment banking and trading, as well as alternative investments, which offers hedge fund and private equity services.
“Each year we identify the bottom 5 percent of performers in the institutional clients group, and some number of these people leave the firm,” Castellani said. “This year, we will have a larger number of reductions as we continue to strengthen the business and lower our expense base.” He declined to specify how many jobs the group is cutting.
The New York Times earlier reported the 2,000 job cuts. It said most will be in New York and London, with some in other European markets and Asia, and that traders are more at risk in light of market conditions.
In afternoon trading, Citigroup shares rose $1.59, or 7.8 percent, to $22.00 on the New York Stock Exchange.
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