Citigroup to cut at least 10,000 jobs

Banking giant to raise rates on some of its credit cards.

Citigroup is cutting at least 10,000 jobs in its investment bank and other divisions throughout the world, the Wall Street Journal said, citing people familiar with the matter.

Citigroup Chief Executive Vikram Pandit and his deputies have instructed managers to slash their budgets for employee compensation by at least 25 percent, the paper said citing the people."We will continue to carefully manage our head count levels as we re-engineer the company in line with our stated goal and market realities," Citigroup spokeswoman Christina Pretto told the paper.

Meanwhile, Citigroup said it is raising rates for some of its U.S. credit card customers after losses in its global card division skyrocketed.A spokesman declined to say how many cardholders would be affected by the changes or if interest rates would be cut on some accounts. Citigroup had 182.7 million open card accounts during the third quarter.

The downturn in the economy has led to rising defaults on all types of loans this year, such as credit cards. Credit losses in Citigroup's global card division rose to $1.59 billion in the third quarter from $1.05 billion during the same quarter in 2007, as more customers missed payments. Credit losses include loans written off as not being repaid. Overall, the card division lost $902 million in its card division during the third quarter. It earned $1.44 billion in the unit during the third quarter in 2007.Customers will be able to opt out of the changes and instead use their cards until they expire. People who opt out can pay down balances under the old terms, the company said.

The company is dealing with broader problems in its operations amid the ongoing credit crisis. It has reported an overall loss each of the last four quarters, including a loss of $2.8 billion during the third quarter.

From MSNBC
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