As expected Citigroup said it will eliminate 17,000 jobs as it trims the fat from operations. Technology consolidation is a big part of the restructuring.
The restructuring savings will amount to $2.1 billion in 2007, $3.7 billion in 2008, and $4.6 billion in 2009.
Among the key components outlined in a statement:
- Simplify IT and cut spending. Citigroup's to-do list: "consolidation of data centers; improved capacity utilization of technical assets and optimizing global voice and data networks; standardizing how the company develops, deploys and runs applications; and maximizing value by limiting the number of software vendors to operate at scale."
- Consolidate back-office and support functions. The company says more than 9,500 jobs will be moved to lower-cost locations, both domestically and internationally, with about two-thirds through attrition.
- Expand centralized procurement. At the end of 2006, the company had centralized 65% of its overall purchases. That amount is expected to increase to 80% by the end of 2007 and be close to 100% by the end of 2009. The company will also centralize functions such as human resources.
As Nick Carr notes, the amount of IT waste at Citigroup is simply stunning. Shouldn't standardizing how apps are deployed and managing the technology portfolio be standard operating procedure?