Citigroup will take a charge of about $400 million in the fourth quarter tied to the reductions, including severance, Pandit, 54, said today during an investor conference in New York. Citigroup, the third-biggest U.S. lender by assets, employed (C) about 267,000 people as of Sept. 30, according to a quarterly filing.

Pandit is cutting staff as the European sovereign-debt crisis persists and banks prepare for regulations on minimum capital levels to take effect, threatening revenue from trading and investment banking. Citigroup said in September it would limit hiring to “critical” jobs to control costs.

“The 4,500 is a drop in the bucket for them, particularly when you consider how big they are and their global scope,” Nancy Bush, an analyst at SNL Financial, a bank-research firm in Charlottesville, Virginia, said in a phone interview. “I’d be suspicious that this may be the tip of the iceberg.”

Pandit has cut more than 100,000 jobs since he became CEO in December 2007 through dismissals and sales of distressed assets and businesses from the New York-based lender’s Citi Holdings unit.

‘Extremely Challenging’

“Financial services faces an extremely challenging operating environment with an unprecedented combination of market uncertainty, sustained economic weakness in the developed economies and the most substantial regulatory changes we have seen in our lifetimes,” Pandit said today. “These trends will likely significantly affect the competitive landscape in the coming years.”

Financial firms worldwide have cut more than 200,000 jobs this year, up from about 58,000 last year and 174,000 in 2009, according to data compiled by Bloomberg. Bank of America Corp. CEO Brian T. Moynihan said the Charlotte, North Carolina-based lender plans to eliminate 30,000 jobs in the next few years.

Citigroup slid 0.3 percent to $29.75 today in New York and has dropped 37 percent this year.

Some of the job cuts at Citigroup will come from the firm’s proprietary-trading operations as regulators seek to restrict banks from betting shareholder cash, Pandit said. The bank said in October that it’s closing the Equity Principal Strategies unit, a proprietary-trading operation run by Sutesh Sharma.

Revenue Declines

Citigroup posted a 74 percent increase in third-quarter profit, aided by a $1.9 billion accounting gain that softened the impact of lower trading and investment-banking revenue. Excluding the accounting figure, the bank’s revenue for the period fell 8 percent to $18.9 billion.

Most of that accounting gain stemmed from a credit- valuation adjustment, or CVA. This required Citigroup to write down the value of its debts amid a widening of the bank’s credit spreads, the extra yield investors demand to own a corporate bond rather than U.S. Treasuries.

The spreads have tightened this quarter, Pandit said. If the fourth quarter ended yesterday, the bank would post a $200 million negative CVA, compared with a $1.9 billion gain in the previous quarter.

Citigroup’s lending business in its securities and banking operation also would record a loss of about $300 million tied to hedges if the quarter ended yesterday, Pandit said. Hedges are bets that firms make when seeking to curb potential losses on existing positions.

To contact the reporters on this story: Donal Griffin in New York at Dgriffin10@bloomberg.net; Dakin Campbell in San Francisco at dcampbell27@bloomberg.net

To contact the editor responsible for this story: David Scheer at dscheer@bloomberg.net

• U.S. Said to Seek More Than $10 Billion Penalty From BNP   (2014-05-30 09:35:40)
• Apple Agrees to Buy Beats Electronics for $3 Billion   (2014-05-29 09:42:30)
• JPMorgan’s Pinto Shuffles Deputies, Names Hernandez Unit Co-Head   (2014-04-08 08:55:29)
• JPMorgan Folds London Whale Office Into Another Unit   (2014-04-04 09:51:48)
• JPMorgan Folds London Whale Office Into Another Unit   (2014-04-04 09:51:29)
• JPMorgan Folds London Whale Office Into Another Unit   (2014-04-04 09:51:17)
• China Construction Bank Profit Beats Estimate on Margins   (2014-03-31 10:50:22)
• Madoff Aides Convicted in $17.5 Billion Ponzi Trial After Decades Working for Firm   (2014-03-25 13:24:38)
• Fed Revises Worst-Case Stress-Test Results for Biggest Banks   (2014-03-22 09:45:32)
• BofA, Citigroup, Credit Suisse Sued by FDIC Over Libor   (2014-03-15 10:32:09)