Citi to Shed 50,000 Jobs Through Asset Sales and Layoffs

New York-based Citigroup Inc. (NYSE: C) announced a monumental job cut yesterday of over 50,000 positions, or 15 percent of their 352,000 workforce over the next year.

The announced job cuts are adding to the 23,000 job cuts announced by Citigroup in the third quarter.

In October, the bank eliminated 9,100 positions, announced a decrease of 16,900 positions yesterday and has plans to cut 26,000 positions through asset sales. Citigroup is aiming to downsize their employee number to 300,000.

Most of the downsizing will come from two categories: divestitures and attrition/layoffs, a Citigroup spokeswoman told insideARM.

Citigroup’s executives are racing to match expenses to its declining business: the company has lost $10 billion over the past nine months.

In an employee meeting Monday morning, Citi Chief Executive Officer Vikram Pandit didn’t say which divisions would be targeted for the most job cuts, or which businesses might be sold. Pandit has been selling businesses he considers “non-core’” to the bank’s operations.

Restructuring and asset sale charges incurred from downsizing have not been fully determined yet, but once they are determined, Citigroup will announce the charges in due course, said the spokeswoman.

Citigroup’s third quarter earnings report revealed a net loss of $2.8 billion, including $4.4 billion in net pre-tax write-downs in Securities and Banking, $4.9 billion in net credit losses and a $3.9 billion net charge to increase loan loss reserves.

Pandit is accelerating cost cuts after the bank’s stock price fell 19 percent last week on the concern that a global recession will curb new lending just as more home and credit card loans become delinquent. Citi’s stock is now trading at a 12 year low.

Profits remain elusive following four straight quarterly losses, as bad-loan costs run $4 billion above last year’s levels. Last year, the bank lost more than $20 billion. According to Reuters, analysts don’t think the bank will turn a profit before 2010.

Citigroup spokeswoman Christina Pretto told BusinessWeek that in May Pandit announced a blueprint for stabilizing the bank’s business, including $15 billion in "reengineering benefits." Pretto said the recent job cut announcement, "is simply a way of telling the world what is the next wave of our effort to reduce our expenses and be a more productive company."