Charles O. Prince III spent his first two years as chief executive of Citigroup adding more compliance officers and improving the bank’s controls after a series of messy scandals. Now, Mr. Prince is looking to slim its bulging compliance ranks in an effort to keep the bank from getting bogged down.
Under pressure from investors, Mr. Prince is set to release plans on Wednesday for the bank’s first major overhaul since a merger forged Citigroup a decade ago. He is planning to eliminate or reassign more than 26,000 jobs, or about 8 percent of the work force, as part of a broad effort to streamline the bank’s unwieldy global operations and get its costs under control.
Citigroup’s consumer and investment banking businesses are expected to face the most severe cuts. But across the company, legal and compliance departments are being heavily scrutinized, according to The New York Times.
Cuts in compliance would represent a reversal from a few years ago, when Citigroup was beefing up its compliance staff after several scandals. Citigroup, like other banks, was tarred by its dealings with Enron and WorldCom and by investigations into analysts’ conflicts during the Internet boom.
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