Citigroup plans 1,400 jobs cull

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Citigroup will cut 1,400 jobs from its corporate and investment banking unit in the first quarter as it begins the cost-cutting effort prompted by a 62% plunge in net income at the unit last year.

The bank said in a preliminary filing of its annual report with the Securities and Exchange Commission, the US regulator, that it expects to take a $275m (€208m) charge in the first quarter related to the job cuts.

The cuts amount to about 3% of the unit's 48,000 employees. Sources close to the bank said the cuts would come at all levels.

Chuck Prince, chief executive of Citigroup, is trying to cut costs in the investment bank, where expenses have recently been rising faster than revenues. Analysts had previously predicted around 1,000 job cuts.

The bank saw net income plunge to $2bn in the 12 months to December last year, down from $5.4bn in 2003. The fall was based largely on its $4.95bn settlement with investors in WorldCom, the US telecoms company that went bankrupt after an accounting scandal.

Prince recently ordered staff to tighten internal controls following the involvement of Citigroup in some of the highest-profile corporate scandals of recent times.

In the fourth quarter, non-interest expenses rose 25% to $3.3bn, including a 48% rise in compensation and benefits, while revenue rose just 15%.

In Europe, the firm is cutting analysts at Citigroup Smith Barney, its independent equity research arm.

A raft of investment banks have been cutting front line investment banking jobs. Credit Suisse First Boston has cut 300 jobs, JP Morgan is eliminating 12,000 globally and Deutsche Bank is in the process of cutting 6,000.

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