Citi to Lay Off 10,000, Raise Credit Card Rates

Banking behemoth will shed 10,000 as it grasps for positive cash flow
By Clay Dillow,  Newser Staff
Posted Nov 14, 2008 7:13 AM CST
Exterior of Citigroup offices in San Francisco, Thursday, Sept. 18, 2008.   (AP Photo/Paul Sakuma)
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(Newser) – Citigroup, seeking profitability after suffering net losses of $20 billion over the past year, is laying off at least 10,000 employees worldwide and raising rates on some credit card holders, the Wall Street Journal reports. Officials were told to trim employee compensation budgets by 25%, allowing managers to minimize firings by cutting higher-paid bankers and traders from payrolls.

The moves come amid reports that directors want to replace Sir Win Bischoff as chairman. Citi’s credit card portfolio includes 54 million active accounts, but the financial downturn has swamped the unit. It posted a $902 million loss in the third quarter, compared to a $1.4 billion profit the previous year. The 3-point rate increase, which will hit about 20% of customers, follows a similar move by American Express.