Showing posts with label Citigroup. Show all posts
Showing posts with label Citigroup. Show all posts

Thursday, June 20, 2013

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Wipro wins deal worth $500m from Citigroup

Wipro is said to have won a $500-million (Rs 2,900 crore) outsourcing contract from Citigroup. The win will come as a boost for the Bangalore-based company that has been going through a lean patch.

Wipro will provide application development and maintenance, and infrastructure services for Citi's global operations. The five-year engagement requires Wipro to set up an offshore delivery centre in Bangalore, said sources familiar with the development. When TOI contacted Wipro, the company said it does not comment on market speculation. Citi too declined to comment on what they call market speculation.

Citigroup had called for bids for a $1 billion IT contract. TCS, HCL, Infosys, Wipro and Cognizant were said to have put in bids along with IBM, Accenture, Dell and others for this contract. Citi already has large outsourcing deals going with TCS and Wipro. Wipro had acquired Citi Technology Services for $127 million in 2008. Wipro and Citibank had signed an agreement to take over the operations and management of Citi's data centre in Meerbusch, Germany, a suburb of Dusseldorf, in 2010. Wipro had intended to use the site to support other outsourcing clients too. The Meerbusch centre was Wipro's first data centre facility in Europe and enabled the company to offer a full portfolio of infrastructure management solutions to its global clients. TCS had won a $505 million outsourcing contract from Citigroup to handle their core back office processes and customer transactions in 2008.
Source: TimesOfIndia

Saturday, July 18, 2009

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Citigroup cuts nearly 30,000 jobs in second quarter

Citigroup has slashed nearly 30,000 jobs in the second quarter of this year as the banking major resorted to cost cutting measures to tackle the financial turmoil.

The banking behemoth has swung into a profit of $4.28 billion in the second quarter on the back of a gain of $6.7 billion from the stake sale of Smith Barney brokerage.

According to the company, in the second quarter, the number of employees stood at around 2,79,000.

"Head count declined by approximately 30,000 from the first quarter of 2009, to 2,79,000, mainly driven by Smith Barney transaction," Citigroup said while announcing the second quarter results today.

"Head count is now approximately 96,000 below peak levels. June was the 20th consecutive month of head count decline," the statement said.

In the second quarter of last year, the company had a loss of $2.49 billion, it said in a statement.

Revenues for the second quarter surged 71 per cent to $30 billion as compared to the same period a year ago. In the comparable period, revenues stood at $17.5 billion.

Citigroup has already received three lifelines from the US Federal government including fresh capital injection to the tune of $45 billion to tide over the financial turmoil.Citigroup cuts nearly 30,000 jobs in second quarter
Citigroup has already received three lifelines from the US government including fresh capital injection to the tune of $45 bn to tide over crisis.

NEW YORK: Citigroup has slashed nearly 30,000 jobs in the second quarter of this year as the banking major resorted to cost cutting measures to tackle the financial turmoil.

The banking behemoth has swung into a profit of $4.28 billion in the second quarter on the back of a gain of $6.7 billion from the stake sale of Smith Barney brokerage.

According to the company, in the second quarter, the number of employees stood at around 2,79,000.

"Head count declined by approximately 30,000 from the first quarter of 2009, to 2,79,000, mainly driven by Smith Barney transaction," Citigroup said while announcing the second quarter results today.

"Head count is now approximately 96,000 below peak levels. June was the 20th consecutive month of head count decline," the statement said.

In the second quarter of last year, the company had a loss of $2.49 billion, it said in a statement.

Revenues for the second quarter surged 71 per cent to $30 billion as compared to the same period a year ago. In the comparable period, revenues stood at $17.5 billion.

Citigroup has already received three lifelines from the US Federal government including fresh capital injection to the tune of $45 billion to tide over the financial turmoil.

Thursday, June 25, 2009

Citigroup to raise base pay by 50%

Citigroup intends to raise workers’ base salaries by as much as 50 per cent this year to offset smaller annual bonuses, according to people with direct knowledge of the plan.

The shift means that most Citigroup employees would make as much money as they did in 2008, although some might earn more and others less. The company also plans to award millions of new stock options to employees in an effort to retain workers and neutralise a precipitous drop in the value of their stock holdings.

Like Citigroup, US financial companies such as Bank of America and Morgan Stanley are raising employees’ base salaries to try to shift attention away from bonuses and to curb excessive risk-taking. So are banks like UBS and other European competitors.
The Citigroup proposals, discussed internally this week, present a crucial test for president Barack Obama’s administration, which has vowed to rein in runaway compensation at companies that have received large, taxpayer-financed bailouts.

Citigroup has gotten two rescues from Washington. Soon, the US government will assume a 34 per cent stake in the company, whose share price has plunged nearly 84 per cent in the last year.

Despite Washington’s new role at Citigroup and public anger over big paydays on Wall Street, administration officials have little power to prevent the company and others in the industry from raising salaries for rank-and-file employees.
Kenneth R Feinberg, the administration’s new “pay czar,” has the authority to set compensation for only the top 100 employees at troubled companies. The rest — which at Citigroup means hundreds of thousands of people — can be paid as executives see fit, provided any increase does not rank them among the 100 most highly paid workers.

Outsize pay on Wall Street, particularly the industry’s bonus culture, is widely seen as having encouraged the risk-taking that led to the financial crisis. But industrywide, total compensation is expected to rise 20 to 30 per cent this year, approximately to the levels of 2005, according to Johnson Associates, a compensation consulting firm. Total industry pay would still be below the record levels of 2007, but only a bit.

“You can say it is outrageous,” said Alan Johnson, the president of the consulting firm. “But maybe it’s a little like the canary in the mine, and you say that things are getting better.”

Indeed, despite the simmering anger over Wall Street pay, some of the 10 big banks that repaid their government aid this month — a big step toward disentangling themselves from the government — are gearing up to pay outsize bonuses. For many, profits are up, despite the troubled economy. On Monday, Goldman Sachs, which returned $10 billion of bailout funds, denied reports that it planned to pay out the highest bonuses in its 140-year history.

Citigroup executives are so eager to keep employees from fleeing that in some cases they are offering them guaranteed pay contracts. Managers began notifying bank employees of the proposed changes this week. They could take effect shortly.

For some Citigroup investment bankers and traders, the changes could mean salary increases of as much as 50 per cent, depending on their position. Legal and risk management employees, as well as those in the credit card and consumer banking units, whose pay is typically skewed toward salary, rather than bonuses, are expected to receive smaller increases.

Stephen Cohen, a Citigroup spokesman, said that any changes would be intended to adjust the balance between salaries, which are fixed, and bonuses, which vary from year to year.
Source: mydigitalfc.com

Thursday, June 18, 2009

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Citi in talks with IT cos to sell tech assets

Citibank is currently in discussions with Indian IT firms Tata Consultancy Services (TCS) and Wipro, among others, to sell some of its internal IT platforms, two people familiar with the discussions said.

The deal, which could be valued between $60 and $100 million, includes intellectual property (IP) used for delivering equity trading services.

“With this IP, we will not only gain business from Citi, but also be able to offer services to other financial services customers using the same platform,” said a senior executive at one of the IT firms negotiating with Citi to acquire its technology assets. He requested anonymity because he is not authorised to comment on the proposed transaction, which is still in an early stage.

When contacted by ET last week, Citi spokesman Godwin Chellam said that his company would not comment on any speculation. Officials at TCS and Wipro, too, declined to comment. Another person familiar with Citi’s restructuring and other outsourcing initiatives said the bank started evaluating the sale of all non-core assets and business units almost two years ago.

“Transactions with TCS and Wipro were part of Citi’s overall drive to move out of non-core businesses and raise cash by selling some of the internal assets,” he said.

Friday, May 29, 2009

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Citi to stay with TCS, Wipro, drop Infosys

Citigroup, which sold its back-office captive centres to TCS and Wipro last year, plans to consolidate its outsourcing with these vendors in India, and drop others such as Infosys Technologies, India’s second-biggest software services exporter, reports Pankaj Mishra.

The Bangalore-based Infosys could see around $25 million of its annual revenues from Citi go to rivals like TCS and Wipro, according to an official at one of these companies, requesting anonymity.

Citibank has a $2.5-billion nind-year contract with TCS and a $500-million six-year contract with Wipro. However, since Infosys does not derive any significant revenues from Citi, the company is not expected to be hit severely. Infosys has bigger, over $50-million contracts with top US banks, including Bank of America and American Express.

“Citi’s entire infrastructure management, back office and maintenance work is being shifted to TCS and Wipro, including around $25 million worth of contract with Infosys,” the official said.

An Infosys spokeswoman declined to comment about a specific customer. TCS and Wipro officials also did not comment.

When contacted by ET on Thursday, Godwin Chellam, a spokesman for Citi did not offer any specific comments.

In a year when Citigroup plans to spend around 8% of its revenues on IT, unchanged from last year, the biggest US bank wants to sweat the buck more by working with fewer vendors handling more work at lower rates. According to an outsourcing expert, who requested anonymity, Citi wants to save over $1 billion in IT costs this year alone by integrating various systems and consolidating its supplier base.

Citibank sold its Indian back office business to TCS for around $505 million in October last year, and Citi Technology Services for around $127 million to Wipro in December last year. Both these transactions came with assured outsourcing business for the vendors. By selling off these non-core captive operations, bundled with long-term outsourcing contracts, Citi was able to get better rates from TCS and Wipro.

“In tough times, customers such as Citi can give you volume growth, but lower rates, they have better bargaining powers,” admitted a senior executive at one of the vendors working for Citigroup. He requested anonymity because he did not want to offer official comments about a customer’s outsourcing strategy.

Jagdish Rao, global technology head, Citi said in December last year that he would focus on reducing costs. “The focus is on how much more can we get out of the existing budget,” said Mr Rao. Citigroup outsources IT contracts to leading vendors such as IBM, TCS, Wipro and Infosys. “A large part of our IT budget is dedicated to infrastructure and application maintenance, and that will remain a mandatory spend,” he said.

While TCS gained a back office contract worth $2.5 billion over a period of nine years as part of the deal, Wipro signed a master service agreement with Citi for a six-year infrastructure management contract worth $500 million. “It could be twice as much of that amount over the next few years,” Mr Rao said. “As we face these challenges, there will be greater demand to move more work to offshore locations,” Mr Rao added.

Monday, May 25, 2009

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Citigroup eyeing ways to trim IT costs

Citigroup is believed to be looking at ways to trim its IT costs. This could spell good news for Indian IT vendors like TCS and Wipro who count Citi as their top client.

The bank, which has been repeatedly bailed out by the US government, has undergone a major restructuring exercise of its business portfolio in the recent past. It is looking to integrate thousands of systems and cut down on application, maintenance and development (AMD) costs, said a source close to Citi.

This integration process will bring new business for Indian IT vendors like TCS, Wipro and Infosys as the bank is keen to outsource the process to save on costs. A Citi spokesperson said, "We have no detail on or confirmation of these developments at this moment."

While this could translate into new business contracts for Indian IT vendors, the existing AMD and IT services contract could see a 15-20% drop in budgets over the next 6-8 months.

After the acquisition of Citi's back-office CGSL in the second-half of 2008, TCS considers the bank as its top client accounting for 4.7% of its revenues in FY 2008-2009. This has dropped by 1.5% since the first quarter.

However, a TCS spokesperson declined to comment on any specific client, while a Wipro spokesperson said, "We do not comment on speculative reports and we continue to partner with Citi in increasing diverse initiatives to improve the efficiency of their IT systems and operations."

Thursday, December 4, 2008

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More financial services IT jobs cut

Source: ComputerWeekly.com

IT Job cuts in the UK financial services sector are continuing as companies get themselves ready for worsening economic conditions.

HSBC will cut another 500 jobs and Swiss banking giant credit Suisse has announced 650 UK jobs to go. Both announcements include IT jobs cuts.

Banks have been reducing staff numbers. They see IT and back office functions as surplus to requirements when business levels fall.

HSBC cut 1,100 jobs in its investment banking division in September including 500 front and back office jobs in London.

Credit Suisse, which made a loss in the third quarter of this year of £704m, has announced 650 job cuts including IT support functions.

"Due to market conditions and projected staffing levels required to meet client needs, we are reducing headcount by approximately 650 in the UK," said Credit Suisse.

Citigroup plans to cut its global workforce by 52,000 jobs across all businesses and geographies in the near future. Citigroup CEO Vikram Pandit revealed last month that the bank would cut 20% of its employees at the group.

A Citigroup spokeswoman said half of the job cuts will come from the sale of business units. The company had earlier announced 18,000 job cuts when it sold its Global Services unit in India to Tata Consultancy Services for £300m.

Pandit said earlier this year that it was feasible for the bank to take 10%, 15% or 20% off its cost base, especially in IT and operations.

The Royal Bank of Scotland (RBS) is expected to make thousands of job cuts as it comes to terms with the economic slowdown. According to various reports last month, up to 3,000 jobs will be cut in the bank's global banking and markets divisions.

Barclays is also expected to cut IT jobs at its FirstPlus loans business as it closes to new business. It will keep its IT infrastructure to process existing customer loans, but is scaling it back.