(Bloomberg News) Citigroup Inc., the third-biggest U.S. bank, will limit hiring to only "critical" jobs as the economic slowdown continues and revenue slumps.
The plan will apply to Citigroup's trading and investment- banking units worldwide as well as consumer banking and global transaction services, Shannon Bell, a spokeswoman for the New York-based bank, said in a phone interview. The bank had 263,000 employees at the end of the second quarter.
Chief Executive Officer Vikram Pandit is trying to control costs as weakening consumer confidence and high unemployment threaten profit. Bank of America Corp. and HSBC Holdings Plc have each announced plans to slash 30,000 jobs while firms including Lloyds Banking Group Plc and UBS AG have also announced headcount reductions.
"In light of the current environment and our ongoing efforts to tightly manage expenses, we are currently only filling positions we believe are critical to the line of business or function," Bell said.
Citigroup rose 57 cents, or 2.1 percent, to $27.96 in composite trading on the New York Stock Exchange at 10:03 a.m. The shares tumbled 42 percent this year through yesterday, underperforming the 24-company KBW Bank Index, which was down 27 percent.
Bell declined to comment on whether the bank planned to cut jobs at any of its so-called core businesses, including trading and investment banking.
"It does look like a hiring freeze," said Richard Staite, a London-based analyst at Atlantic Equities LLP who has an "overweight" recommendation on Citigroup shares. "I don't think that's too surprising in what is a very difficult revenue environment for all banks. They clearly face a difficult balancing act."
Expenses at the bank rose 8 percent to $25.3 billion for the first half of 2011, compared with the same period last year. Chief Financial Officer John Gerspach told analysts in July that expenses for the year would be higher than previous forecasts.
Revenue for the first six months fell 15 percent to $40.3 billion, including sales at the bank's Citi Holdings unit, which has about $300 billion of unwanted businesses and assets. Profit fell 11 percent to $6.34 billion.
Sales at Citigroup's securities-and-banking unit, which includes trading and investment banking, fell 18 percent to $11.5 billion. Regional consumer banking revenue stayed flat at $16.2 billion. The bank's transaction-services unit increased revenue 6 percent to $5.2 billion.