US banking giant Citigroup is axing 17,000 jobs under a cost cutting and restructuring plan that includes the shifting of 9500 roles to "lower cost locations" and streamlining of in-house technology functions.
Citi says it will consolidate certain back office, middle office and corporate functions at the business, regional and headquarter levels to eliminate duplication.
More than 9500 jobs will be moved to lower-cost locations, both in the US and internationally, with two thirds of that through attrition.
The restructuring includes a previously disclosed programme to streamline and rationalise IT across the group, which is expected to save about $2bn a year by 2009.
Citi says it will continue to rationalise operational spending on technology with initiatives including consolidating its data centre and standardising how it develops, deploys and runs applications. The bank says it will also look to maximise value by "limiting the number of software vendors to operate at scale".
The bank is also looking to increase the use of share services across the group, including the creation of 'utilities' in areas such as legal, human resources, risk management and financial operations, as well as the sharing of regional and country middle office functions in international markets.
Citigroup also aims to expand centralised procurement - at the end of 2006 this covered 65% of overall purchases and this is expected to grow to 80% by the end of 2007 and 100% by the end of 2009.
Commenting on the shake-up, Citi chairman and CEO, Charles Prince, says the moves, which follow a three-month expense review, would improve the bank's ability to grow.
"The recommendations that emerged from the structural expense review will improve business integration, as well as our ability to move quickly and seize new growth opportunities," says Prince in a statement.
The US bank expects the restructuring to cut costs by $2.1bn this year, $3.7bn in 2008 and $4.6bn in 2009. It will take a $1.38 billion pre-tax charge in the first quarter and expects $200 million of additional pre-tax charges this year.