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Citi Proceeds With Mortgage Layoffs

Citi Proceeds With Mortgage Layoffs180 jobs to be eliminated by June

January 25, 2008

By SAM GARCIA

CitiMortgage has notified around 180 employees that their jobs will be eliminated by this summer.

The Citigroup subsidiary advised about 100 mortgage servicing employees in Des Moines, Iowa, this week that their positions would be eliminated by June, spokeswoman Janis Tarter told MortgageDaily.com in an e-mail statement.

In addition, she said 80 people employed in Great Falls, Mont., were also advised they would be laid off.

“CitiMortgage and its predecessors have been part of the Great Falls economy for over 15 years,” the city said in a statement. “We believe the employees who want to will be readily absorbed by other call center kinds of businesses here. We do not expect a major impact on the economy.”

The job cuts are part of 17,000 positions the New York-based company said it planned to eliminate in an announcement last April after a structural expense review of the operations of all its units.

“As a result of this review, the company will … consolidate certain back-office, middle-office and corporate functions at the business, regional and headquarters levels to eliminate duplication of effort and to focus instead on building truly efficient, world-class back-office and support functions,” April’s announcement stated. “More than 9,500 jobs will be moved to lower-cost locations, both domestically and internationally, with about two-thirds through attrition.”

Citigroup posted a $9.83 billion net loss in the fourth quarter driven by $18.1 billion in subprime mortgage write-downs and $4.1 billion in consumer loan losses. The massive losses led to the ouster of Chairman and Chief Executive Officer Charles Prince in November.

Citi said it would obtain $12.5 billion in investments through a private offering from the Government of Singapore Investment Corporation Pte Ltd, Capital Research Global Investors, Capital World Investors, the Kuwait Investment Authority, the New Jersey Division of Investment, HRH Prince Alwaleed bin Talal bin Abdulaziz Alsaud, and former chairman Sanford I. Weill and The Weill Family Foundation.

In addition, a $2 billion preferred stock public offering would be made and its dividend would be cut to $0.32 per share from the $0.54 per share that was paid in each of the four prior quarters.

Citi Residential Lending, formerly known as Argent Mortgage Co., was merged into CitiMortgage, according to a memo to employees earlier this month. A spokesman would not comment on potential layoffs or charges associated with the move, noting they were just beginning the integration process.

Affected mortgage employees from this week’s actions are being encouraged to explore other available jobs at Citigroup, Tarter said in today’s statement.

“We are helping to facilitate that,” she said. “Citi’s consumer business has more than 50 operations and technology sites in the U.S.”

Employees who don’t find other jobs within the company will be given severance pay based on their tenure, Tarter added.


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