The deepening banking crisis worsened with an announcement by Citigroup it will shed 52,000 jobs, with losses heavy in London and New York.
The cut – with previously announced job losses of 22,000 – will leave a global total of 300,000 employees.
Citigroup employs 12,000 in its UK businesses, the majority in London and Derby, where online bank Egg is based.
The company has posted four straight quarterly losses, including a loss of $2.8 billion (£1.9 billion) in the third quarter this year.
Speaking at a business forum in Dubai, United Arab Emirates, Citigroup chairman Win Bischoff said it would be irresponsible for Citi and other companies not to look at staffing in a prolonged economic downturn.
“What all of us have done – perhaps injudiciously – we’ve added a lot of people over this very benign period,” he said. “If there is a reversion to the mean those job losses will obviously fall particularly heavily on the financial sector. Certainly they will fall particularly heavily on London and New York.”
Mr Bischoff did not rule out the likelihood Citi’s leaders would go without bonuses – a move that would amount to a substantial pay cut for company’s executives.
“Watch this space,” he said.
The plans were due to be discussed with employees in New York yesterday.
Citigroup said staff numbers were being reduced by 20 per cent from a peak of 375,000 at the end of 2007.
It said it expected expenses to be down 20 per cent from peak levels once the cuts have taken effect.
The company said it planned a “significant reduction in risky assets” going into 2009. Citigroup had a “very strong” capital position, it added.
Of the 52,000 job losses, half are understood to already be accounted for with the previously announced sale of Citigroup’s German retail banking business and Indian outsourcing arm.
The remaining 25,000 would be shed by the first half of 2009. Citigroup declined to comment on the cuts.
Gordon Brown’s spokesman told reporters: “Obviously we are concerned. Any job losses are a matter for regret. The Government stands ready to provide whatever support it can to help people find new jobs.”
Last week, Citigroup stock fell into single digits for the first time since Sanford Weill created the bank in 1998 from the merger of Travelers Group and Citicorp.
Well over 100,000 jobs have been lost at the largest banks and brokerages. In the last month, Goldman Sachs began cutting 3,200 jobs, while Morgan Stanley has said it will cut 10 per cent of the jobs in the unit housing its investment banking operations.
Citigroup said it plans to make the latest job cuts in the “near term”. People at the New York bank said it expects to complete reductions in the first couple of months of 2009.
“If the past is any guide, Wall Street overshoots in terms of hiring, and then overshoots when it’s time to cut jobs,” said Walter Todd, portfolio manager at Greenwood Capital Associates, which invests $1 billion.
According to sources Citigroup has no need to cut its dividend, educed twice this year. Investors remained wary. Through Friday, the bank’s stock was down 68 per cent this year.