Citigroup Inc. (C) has announced 100 job cuts on New York’s Long Island, according to a Bloomberg report. The jobs cuts are part of a greater retrenchment program that includes slashing 5,000 jobs and was announced earlier this year by Mr. Pandit, the former Chief Executive Officer of Citi.
According to the Bloomberg report that cited Citi’s filing with the state Department of Labor, notices were being served to the staff members since July. Further, the employees in the Nassau County town of Uniondale would bear the impact. It would be accomplished by March 3, 2013.
This 100 retail bank staff retrenchment of Citi on Long Island comes as the company counters revenue slouch with expense cut initiatives. With its new CEO, Michael Corbat, Citi remains committed to continue with the efficiency improvement measures and the expense management efforts.
In the midst of a challenging operating environment, lower returns and stringent capital norms, many Wall Street banks are trimming businesses to meet the aforementioned challenges. In addition to Citi, Bank of America Corp. (BAC) is rightsizing its business and slashing jobs to address revenue slump.
We believe that amid a tepid economic recovery, bolstering revenue has become a challenge. Therefore, sustaining and elevating profitability through cost reduction measures including job cuts is what several banks are looking at. Therefore, until a recovery in revenue occurs, such actions are anticipated to continue and help in strengthening profit levels and capital ratios.
Citi currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. Considering its fundamentals, we also have a long term Neutral recommendation on the stock.