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Net Net: Promoting innovation and managing change

Citigroup expected to begin cuts soon

Signage outside a Citibank branch at the Citigroup Center in Los Angeles.
Patrick T. Fallon | Bloomberg | Getty Images

Citigroup is projected to soon begin layoffs of some Wall Street staffers, a source with knowledge of the bank's plans said.

Cuts are expected to impact fixed income and equities trading positions as well as investment bankers, according to the source. The person told that, should the bank's quarterly performance to begin 2016 surprise to the upside, overall head count reductions may be less than what Wall Street expected.

The bank declined to comment when contacted by

The moves to trim staff are the latest in a series of cuts from Citigroup, which substantially reduced head count in the wake of the global financial crisis.

"We've become a simpler and smaller company," CEO Michael Corbat said on the bank's most recent earnings call. "We've made the tough decisions regarding what businesses couldn't generate the returns our shareholders expect and deserve. ... We're going to continue to be mindful and to make sure that we are scaling and sizing our company to what we think the opportunities are."

The bank has also cut back on its real estate footprint, Corbat said.

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In late 2015, reports surfaced saying that Citigroup would cut up to 2,000 staffers; to date the bank has made no official announcements. So far this year its shares are down nearly 18 percent.

Employment on Wall Street rebounded in the years after the financial crisis, hitting a post-crisis high as of the end of 2015, with more than 172,000 jobs, according to a report from the New York State Department of Labor earlier this month. Still, facing pressure in a volatile market this year, a number of big banks have been forced to contemplate layoffs and trim staff in the face of disappointing performance and plunging share prices.

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Wall Street banks have made cuts to various businesses to end 2015 and begin the current year. The same goes for international banks including Royal Bank of Scotland, which announced this week it would cut hundreds of jobs as part of a plan to automate investing advice services.

At Barclays, CEO Jes Staley said Tuesday at an industry event in London that head count was reduced from 145,000 to about 142,000 from 2012 through 2015. Since Staley assumed the leadership role at the bank, however, cuts have accelerated. He said 6,000 more jobs have been culled in the time since he took over in late 2015.

"That's double the last four years [worth of cuts] in the last four months," he told attendees of the Morgan Stanley Financials Conference in London. "In order to work through what has happened to this bank since the financial crisis, we must significantly simplify Barclays."

Wells Fargo has trimmed head count outside of Wall Street, in places including Minnesota and North Carolina. A bank spokesman confirmed 570 cuts in the month of February and said it is looking to retain some in other positions. Morgan Stanley said late last year it would set aside $150 million for layoffs and associated costs; the bank cut 1,200 positions primarily in fixed income and back-office roles. A spokesman for Morgan Stanley declined to comment.

Bank of America also set aside $130 million for severance expenses, its chief executive said on the company's most recent earnings call.

"[W]e did reduce head count in the business, the markets businesses and the related capital markets business," BofA CEO Brian Moynihan said on the call, adding, "We didn't make big announcements, but that led to the $130 million in severance in the fourth-quarter numbers."