Citigroup said Wednesday that it will slash 11,000 jobs, or about 4 percent of its global workforce, putting hundreds of jobs at risk in California.
The cuts will affect Citigroup's consumer banking unit, which handles everyday activities such as branch services and checking accounts. The cutbacks will especially impact overseas operations in South America, Asia and Europe, the banking giant said.
Citigroup said hundreds of jobs could be lost in California, but it wasn't immediately clear exactly how many might be eliminated statewide or in the Bay Area.
"In California, where we have nearly 6,000 employees, the number of positions impacted is proportionate with the global impact," Citigroup spokeswoman Janis Tarter said in comments emailed to this newspaper. Assuming 4 percent of those jobs are cut, that would amount to a reduction of 240 employees in California.
"For the overall economy this is painful," said Michael Yoshikami, chief executive and founder of Walnut Creek-based Destination Wealth Management. "A huge amount of jobs are being lost. It will have a negative impact on money centers such as California. But for Citigroup, this is a positive move."
The bank, the third largest in the country by assets, did not say how many jobs it will cut in the United States.
About 1,900 job cuts will come from the institutional clients group, which includes the investment bank. The company will also cut jobs in technology and operations by using more automation and moving jobs to less expensive states or nations.
The financial crisis dealt a heavy blow to Citi, which nearly collapsed and required two taxpayer bailouts to remain afloat. Rivals such as San Francisco-based Wells Fargo fared much better.
"The banking industry is now made up of haves and have-nots," said Ken Thomas, a Miami-based banking analyst and economist. "Wells Fargo and JPMorgan Chase are the haves. Bank of America and Citigroup are the have-nots."
Citi said it expects the cuts to save $900 million next year, and more in the following years. They will be a drag, though, in the short term: Citi said it expects to record pretax charges of about $1 billion in the fourth quarter.
Although investors liked Citi's moves, sending the bank's shares soaring 6.3 percent higher Wednesday, Thomas warned that the cutbacks come with some hazards.
"It's a two-edged sword," Thomas said. "Customers will say this means finding a new branch, or spending more time in line at the bank, or more time on the phone. And the employees are asking themselves what's next and who's next."
The Associated Press contributed to this report. Contact George Avalos at 925-977-8477. Follow him at Twitter.com/george_avalos.