According to reports that have trickled out of Citigroup (NYSE: C ) this week, the company could start to shed before long -- employees, that is. The nation's largest bank has been under fire from within and from outside during the reign of current CEO Charles Prince for allowing its growth in expenses to substantially exceed its revenue increases.
The figures in rumors -- Citigroup is likely to disclose the particulars of its cost-cutting plan by its April 16 earnings release -- are as many as 15,000 jobs cut (out of an international head count of 327,000) by Prince and Robert Druskin, his longtime associate and Citigroup chief operating officer. Prince and Druskin are proteges of the now-legendary Sandy Weill, who cobbled together the present Citigroup from a host of other financial services entities. Prince replaced Weill in the top job in 2003. Last year, he asked Druskin to oversee a cost-cutting effort at Citigroup.
Along with the job reductions, many of which may come from not replacing a portion of the 50,000 or so employees who leave the bank each year, the Druskin program apparently would involve a charge to earnings of more than $1 billion. A streamlining of back-office operations and a reduction in real estate expenses are also expected.
During the past year, Citigroup's share price has increased about 8.4%, compared with rival Bank of America's (NYSE: BAC ) 11.4% increase and a 16.1% increase at JPMorgan Chase (NYSE: JPM ) . Along with those rivals, in an era of a continuous blurring of the lines separating various types of financial services companies, Citigroup must also stand for comparisons to the more traditional investment banks, such as Goldman Sachs (NYSE: GS ) and Morgan Stanley (NYSE: MS ) .
But while its cost-cutting details take shape, Citigroup hardly is standing still on other fronts. It is continuing in its effort to acquire Japanese broker Nikko Cordial, is expanding its role in China, and recently hired a new chief financial officer, Gary Crittenden, lately of American Express (NYSE: AXP ) .
For my money, Fools, the real question at Citigroup is whether the current powers that be ultimately can measure up to their former leader, Sandy Weill. With the generally positive movements at the company, I'm inclined to keep a close eye on their progress.
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Fool contributor David Lee Smith does own shares in Bank of America -- whose loveliest employee doubles as his spouse -- but not in the other companies mentioned. He welcomes your questions or comments. The Motley Fool has a disclosure policy.
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