Citigroup Expected to Take a $1 Billion Charge, Cut 11,000 Jobs in New Repositioning (C)
On Wednesday financial services giant Citigroup Inc. (C) announced a number of steps to reposition the company to reduce expenses and improve efficiency.
The New York, New York-based company is expected to take a $1 billion charge in the fourth quarter of 2012 in a repositioning move. This action, along with a reduction of 11,000 jobs, is expected to help generate $900 million in expense savings in 2013; beginning in 2014 the moves are expected to exceed $1.1 billion in savings annually.
Citigroup’s Chief Executive Officer Michael Corbat said, “These actions are logical next steps in Citi’s transformation. While we are committed to– and our strategy continues to leverage– our unparalleled global network and footprint, we have identified areas and products where our scale does not provide for meaningful returns. And we will further increase our operating efficiency by reducing excess capacity and expenses, whether they center on technology, real estate or simplifying our operations.”
Citigroup shares were up $1.06, or +3.09%, in premarket trading on Wednesday. The stock is up +30.33% year-to-date.
The Bottom Line
Shares of Citigroup (C) have a .12% dividend yield, based on last night’s closing stock price of $34.29. The stock has technical support in the $30-$32 price area. If the shares can firm up, we see overhead resistance around the $36-$39 price levels.
Citigroup Inc. (C) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.0 out of 5 stars.
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