Citigroup Cost Cutting Puts A Bull's-Eye On IT

[OhioChick]

It'll bear much of the cost-cutting brunt. But it'll also be part of creating platforms for greater efficiency


Apr 14, 2007 12:05 AM (From the April 16, 2007 issue)


Talk about life on the edge. As part of Citigroup's campaign to cut $10.4 billion in spending over the next three years, the banking giant's tech operations have been slapped with a bull's-eye, the target of big consolidation and offshoring projects in the coming months.

Citigroup plans to close half of its 42 data centers, move thousands of jobs to lower-cost locations in the United States and abroad, and possibly replace some big-ticket data storage systems with commodity gear, according to regulatory filings and executives who spoke on a conference call last week.

If the plan works, Citigroup will become "more nimble," chairman and CEO Chuck Prince said. Prince and other executives didn't offer many IT details, but they made clear Citigroup's tech operations will play a central role in the restructuring--both as part of the cost cutting and as a platform Citigroup can use to roll out new offerings more quickly and cost effectively. "The simple fact is, we have to make our middle and back office help us serve our clients better, help us generate revenue better and faster," Prince said. He's under heavy pressure to improve results, after revenue rose just 7% last year to $89.6 billion while operating costs rose 15%.

Citigroup plans to cut 17,000 jobs--roughly 5% of its total workforce--and move 9,500 more positions to "lower cost" locations. More than half the cost cuts are expected to come out of tech and back-office operations. This undertaking rolls in a previously announced IT streamlining that had already begun. "We are now looking at this as one project, as would be expected," chief operating officer Bob Druskin said. "You could not do a structural expense review without technology."

The company didn't specify jobs to be cut, but it's likely many will be in IT given Citigroup's desire for a leaner tech operation. Citigroup already has 19,000 employees in India taking customer service calls, crunching numbers to support investment research, and performing other back-office tasks, mostly from Citigroup Global Services operations in Mumbai and Chennai.

http://www.informationweek.com/news/showArticle.jhtml?articleID=199000996

[BrklynLiberal]

1. I used to work there as a programmer, and still have many friends there.

I wonder how many of them will be replaced by a worker in a "lower cost location"?

[tridim]

2. It's obvious IT workers need to unionize

I've been treated like dirt for about 12 of my 14 years in IT.

[Vincardog]

3. It is not just IT. All workers need to get themselves unionized.

I was treated like shit all 20 years I was in IT.

Luckily the bush economy has had me out of work this century.