By Takahiko Hyuga
Dec. 10 (Bloomberg) -- Citigroup Inc., the U.S. bank that’s eliminating 52,000 jobs worldwide, will shed about 1,000 workers at its retail brokerage unit in Japan, two company officials said.
The workers at Nikko Cordial Securities Inc., which employs about 7,000 people, accepted Citigroup’s offer to take early retirement by a Dec. 8 deadline, the officials said, declining to be identified because a public announcement hasn’t been made.
Citigroup Chief Executive Officer Vikram Pandit plans to eliminate about one-seventh of the lender’s global workforce of 352,000 through job cuts and asset sales after racking up more than $67 billion in losses amid the global credit crisis. The company is cutting jobs in investment banking and consumer finance in Japan and is selling its local trust banking unit.
“It’s inevitable for Citigroup to downsize in Japan as the transaction volume of stock trading is being narrowed and the cancellation of investment trusts has increased,” said Naoki Fujiwara, who oversees about $720 million at Shinkin Asset Management Co. Still, “they have to maintain the bread and butter business for the future as it will be difficult and cost a lot to re-enter the Japanese market from scratch.”
Nikko Cordial offered early retirement to employees over the age of 40 in a Nov. 21 memo from President Eiji Watanabe, two people familiar with the situation said at the time. The offer includes about two years of pay, the people said.
Citigroup’s Tokyo-based spokeswoman, Atsuko Yoshitsugu, declined to comment.
Profit Slump
The New York-based bank, which received a $45 billion bailout from the U.S. government, spent about 1.6 trillion yen ($17 billion) to acquire Nikko Cordial last year. The Tokyo-based brokerage, which has 111 branches in Japan, held 28.2 trillion yen of client assets as of September.
Citigroup shares rose 77 yen, or 10.4 percent, to 820 yen in Tokyo. They have declined 76 percent this year.
Nikko Cordial, which was formed in 1944, on Oct. 27 posted 12.1 billion yen of profit for the six months ended Sept. 30, compared with 20.2 billion yen a year earlier.
Citigroup said in a statement yesterday that Nikko Citi Holdings Inc. deputy chairman Shoji Kuwashima, 53, who was a former president at Nikko Cordial Corp., will leave the firm on Dec. 31.
Nomura Holdings Inc., Japan’s biggest brokerage, plans to eliminate more than 100 positions in Asia and is stepping up job cuts in Japan, two people familiar with the situation said yesterday. It will cut positions in Hong Kong, Singapore and other Asian countries as early as this year, and will also eliminate at least 100 jobs in Tokyo, the people said.
To contact the reporter on this story: Takahiko Hyuga in Tokyo at thyuga@bloomberg.net
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