As it battles plunging earnings, Citigroup Inc. announced today that it would slash headcount by 50,000 and reduce expenses by 20% in the near term. It’s unclear what those moves will mean for CitiFinancial Auto, the bank’s auto unit.
Since being rumored for sale late last year, CitiFinancial Auto has instituted measures meant to streamline operations and cut costs. Earlier this year, the unit fired at least 20% of its workforce, closed half of its 140 loan-production offices, and stopped accepting loans from about 3,000 of its 14,000 dealers. The result: a 33% reduction in origination volume.
Will the auto division withstand closure? Only time will tell.
