Citigroup Inc (NYSE:C) downsizing 1,000 of its workforce


Dallas, Texas 09/24/2013 (Financialstrend) – The home mortgage business in is dire straits and the companies that have been affected the most are those that have operations in this sector. Recently, many major banks have either laid-off or have plans of laying-off staff at their home-mortgage units. The latest in line in Citigroup Inc (NYSE:C). The bank said that it will be cutting more than 1,000 jobs at its home-mortgage businesses in the United States.

 Many banks affected

A rise in interest rates has eroded the demand for refinancing as well as for new loans. Citigroup Inc (NYSE:C) is reducing around 8% of 13,000 jobs that exist in the company’s mortgage-division. Of these, approximately 760 will be in Las Vegas. The other banks that had announced job cuts were biggies such as JP Morgan Chase, Bank of America and Wells Fargo.

 The one difference between Citigroup Inc (NYSE:C) and its peers is that its residential-mortgage lending business is not as large as the others in the industry. In the 1H2013, the bank had captured only 3.9% of the mortgage market. On the other hand, Wells Fargo had 22.5% and JP Morgan had 10.9%.

The cuts

 Of the 1,000 jobs that are being cut, 800 are from the fulfillment, underwriting and sales departments. This clearly indicates the way the mortgage business is trending. A person in the know said that the other 200 jobs have to go as Citigroup Inc (NYSE:C) does not have enough of work coming in on defaults as there are fewer delinquencies and the prices of houses are higher.

Monday’s trading

In Monday’s trading session, Citigroup Inc (NYSE:C) stock dipped by 3.20%. The shares opened at a price of $49.95, climbed to an intraday high of $50.17 and dropped to close at $49.57. Approximately 34.57 million shares were traded on Monday. An average volume of 22.56 million shares were traded over 30 days. The 52-week low of the company’s shares is $31.88 and the 52-week high s $53.56. Citigroup Inc (NYSE:C) has a market capitalization of $150.74 billion.