By Elizabeth Broomhall
New York lender's investment banking division has been hit by Europe’s economic woes
Citigroup employees in the Middle East could face redundancy in the coming weeks as the firm begins a wave of staff cuts around the globe.
The investment bank, which has already begun redundancies in its UK offices, is making 4,500 people redundant globally in a bid to cut back on expenditure.
A person familiar with the matter told Reuters this week that there was likely to be “several hundred” job cuts in the MENA and European region, with areas such as investment banking and equities expected to see the biggest losses.
The redundancies will occur over the next few quarters, insiders said, despite the firm reporting a net income of $3.8bn in Q3 this year, up from $2.17bn in 2010.
According to reports, the move will cost the Citigroup around $400m in redundancy payments and other related expenses.
“As part of our ongoing efforts to control expenses, we are making targeted headcount reductions in certain businesses and functions across Citi,” a spokesperson said in an emailed statement.
Citigroup, the third-largest US bank by assets, is one of a number of international companies to trim its workforce this year in light of the European sovereign debt crisis and tough economic forecasts.
The company has taken the biggest hit in its investment banking division due to the economic turmoil in European markets, with net revenues down 21 percent this year because of a drop-off in mergers and acquisitions, and corporate fund raising.
In Dubai, a number of financial houses have announced staff cuts as they move to reduce costs in a difficult economic climate. Dubai-based Shuaa Capital, Bank of America, Credit Agricole, Deutsche Bank and Al Mal Capital, are among those reducing their employee counts.
Shuaa Capital said in November it would be making a second round of job cuts this year as it sought to move away from the retail brokerage business after markets in its home base declined and losses increased.
Around 25 percent of staff were let go at Al Mal Capital, taking the total number of employees down to 20, while France’s Credit Agricole announced in September it would close down its mergers advisory team in Dubai.