Citigroup Job Cuts Could Reach 35,000: Source

Citigroup plans to shed about 10 percent of its global workforce, a person familiar with the matter said Friday, as it tries to restore profit and quiet mounting criticism of Chief Executive Vikram Pandit.

The cuts could result in a loss of roughly 35,000 jobs, based on the bank's reported 352,000-person workforce as of Sept 30. Citigroup has already cut 23,000 jobs this year. Additional reductions would come from layoffs, the sale of units and attrition, the person said.

Pandit also is expected to give guidance on budget cuts, due in part to criticism over runaway expenses.

(CNBC's Charlie Gasparino reports on the job cuts in video at left.)

Citigroup spokesman Michael Hanretta declined to comment. Pandit in a memo said he will host a "town hall" meeting for employees on Nov. 17 at 8 a.m. New York time, at which he plans to discuss the bank's plans, including "the money we spend."

Since replacing Charles Prince as chief executive in December, Pandit has made cost-cutting a top priority and has announced plans to shed $400 billion of assets. He has, however, faced growing and sometimes withering criticism from investors and others for failing to implement a workable turnaround plan for New York-based Citigroup.

The bank's shares fell this below $10 for the first time since Sanford "Sandy" Weill in 1998 created Citigroup from the merger of Travelers Group Inc with Citicorp.

(For more on Citigroup's troubles—and criticism of CEO Pandit from the bank's board—see the accompanying video.)

Citigroup shares were up slightly Friday. For off-hours, real-time Citigroup stock quotes, click here.

Citigroup's market value on Thursday was just $51.5 billion, barely twice the $25 billion of capital it received from the U.S. Treasury Department's new bank bailout plan.

"The current strategy has been in place for more than a decade," said William Smith, chief executive of Smith Asset Management Inc in New York, which owns Citigroup stock. "I don't know how many more quarters we have to go through this."

Tough Road Ahead

Like many rivals, the second-largest U.S. bank by assets faces growing credit losses now that many economies worldwide appear to be in recession.

But Citigroup is also constrained from growing at home, and Wells Fargo last month derailed its attempt to buy Wachovia and its $418.8 billion of deposits. Citigroup has lost $20.3 billion in the last year, analysts expect it to lose money this quarter, and some analysts believe it may not be profitable in 2009.

The bank was cobbled together principally by Weill, who ceded control to Prince in 2003. But analysts believe Citigroup never invested enough in technology or to make the bank's disparate parts work well together.

And Citigroup's geographic diversity, including operations in more than 100 countries, is by some measures now a negative, as customers in Brazil, India and Mexico—like many in the United States—find it harder to keep up with their bills.

Pandit on Thursday bought 750,000 Citigroup common shares and 100,000 preferred shares—the first time he has disclosed using his own money to buy the bank's stock. He joined Citigroup in 2007 when he sold his hedge fund, Old Lane Partners, to the bank for an estimated $800 million.

Citigroup has this week also tried to set aside reports of dissension among its directors with the performance of Pandit and the bank's chairman, Sir Win Bischoff.

• Real-Time Quotes for Citi and the Rest of the Dow

"The board of directors and management are operating as one team," lead director Richard Parsons, who is also chairman of Time Warner Inc , said in a memo late Thursday to employees. "We are confident that the direction our management team has set is the right direction."

CNBC's Charles Gasparino contributed to this report.

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