4/12/2007

DJ Citigroup Seen Transferring Back-Office Jobs To Poland

mid Citigroup Inc.'s (C) global cost cutting spree an unlikely beneficiary could emerge in the form of Poland, which is seen as a top contender to attract back-office jobs from London.

Announcing its plans Wednesday, Citigroup said a key focus will be to move around 9,500 back-office and support jobs out of its expensive main offices into lower cost locations in the U.S. and internationally.

And there are few locations more expensive than London.

"It looks like some of the U.K. jobs could go to places like Poland," said Joseph Dickerson, an analyst at Atlantic Equities in London.

Citigroup's plan to move thousands of jobs to cheaper regions follows similar strategies from other major banks, including Credit Suisse Group (CS), which has built up support operations in Singapore and North Carolina among other locations, said a second analyst.

Poland would be an obvious choice for Citigroup because it has had an extensive banking network there since it bought Bank Handlowy w Warszawie in 2001.

The other European option would be Russia, where Citigroup has been opening branches recently, but the country's less stable political environment makes that move unlikely, the analyst added.

In total, Citigroup expects to slash around 17,000 jobs in an effort to cut expenses by $2.1 billion. As well as its plans for the back-office, the bank will also thin out the number of mid-level managers.

More than half the cuts - around 57% - will come from the bank's international operations, though the majority of the savings will be in the U.S. market, with consumer banking a key focus, Citi said.

The scale of job cuts in London is unclear, though Atlantic Equities' Dickerson argued it could be less than other countries because the U.K. has only a small retail banking operation.

Those employees that do find themselves in the job market, however, could get help from another U.S. giant, Bank of America Corp. (BAC), Dickerson suggested.

Bank of America has among the most aggressive European expansion plans and will be in need of back- and middle-office staff as well as potentially any managers dropped from Citi's investment banking and trading operations, he noted.
Source: biznes.onet.pl



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