The Wall Street Journal-20080111-Citi Names Levinson As Its -Expense Czar-
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Citi Names Levinson As Its 'Expense Czar'
Citigroup Inc., which has struggled with bloated expenses and weak risk management, announced the creation of two jobs: an "expense czar" and a top risk manager for its investment bank.
The financial conglomerate tapped Carl Levinson, a 35-year Citigroup veteran, to help improve the bank's efficiency and clamp down on costs.
It is the second time in the past year that Citigroup has embarked on such a mission. Mr. Levinson, who got his start on Wall Street as a teenager when he was a "runner" of market orders, earned a reputation as a cost cutter when he overhauled the company's retail bank in 1992.
Separately, Citigroup's new chief executive, Vikram Pandit, established a new risk committee to ride herd on mounting credit problems in its banking groups. The risk committee will be led by Jamie Forese, the investment bank's new co-CEO. Mr. Pandit emphasized in an internal memo that he will remain heavily involved in the banking division's day-to-day operations.
Facing a depleted capital base and a deteriorating business environment, Mr. Pandit is scrambling to conserve cash by reducing expenses and streamlining. He is trying to orchestrate an investment of as much as $10 billion from overseas investors. The company's board next week will consider cutting its quarterly dividend.
For the past month, Citigroup executives have been hammering out a wide-ranging restructuring plan that is likely to include as many as 30,000 layoffs and sales or disposals of entire business lines, people familiar with the matter say.
As part of those plans, Citigroup has been exploring the possibility of shedding its consumer-finance businesses in the U.S. and abroad, people familiar with the matter say. Until he took the new job, Mr. Levinson, 61 years old, ran Citigroup's U.S. consumer-finance businesses, which include its mortgage, home-equity and auto- and student-lending arms. Citigroup didn't name an executive to succeed Mr. Levinson in that role.
A Citigroup spokeswoman declined to comment on any possible asset sales.
Parts of the restructuring initiative could be unveiled as early as Tuesday, when Citigroup reports fourth-quarter earnings that are expected to include roughly $15 billion in mortgage-related losses. Layoffs are under way and expected to intensify next week, a person familiar with the matter said.
